Dubai crisis to impact "specific sectors" of Indian economy
The ongoing Dubai crisis is likely to impact specific segments such as exports, remittance, banking and real estate, while the core industrial growth of the economy is likely to remain insulated, a report says.delhi Updated: Dec 03, 2009 00:09 IST
The ongoing Dubai crisis is likely to impact specific segments such as exports, remittance, banking and real estate, while the core industrial growth of the economy is likely to remain insulated, a report says.
"Segments of the economy such as consumer durable and core industrial growth that are driving the current recovery in the Indian economy are purely a function of domestic stimulus initiatives and remain to that extent relatively insulated," HDFC Bank said in a report today.
However, areas such as exports, remittance, banking and construction as well as real estate are likely to see further damage, the report added.
Exports are going to be the most affected by Dubai woes, as the UAE region is now India's largest export destination toppling the United States.
Besides, bullion trading in Dubai is likely to be impacted, which may have ripple effect for India as around USD 29 billion of gold from the country is being traded in Dubai.
However, the silverline to this whole scenario is that the ongoing crisis would only impact the Dubai's economy, and countries such as Abu Dhabi is likely to remain on a firm keel in comparison and this should help mitigate the damage to India's exports to the UAE, the report added.
On November 25, the Dubai government had announced the restructuring of Dubai World, and asked all providers of financing for the company and Nakheel to "stand still" and extend maturities until at least May 30, 2010.