New Delhi, Dec. 14: The bailout package for Dubai World has brought relief to local exporters.
“This is a positive development. Our exporters were panic-stricken after the crisis erupted. It has brought us relief,” said Ganesh Kumar Gupta, chairman of Vijay Silk House Group as well as of the Synthetic and Rayon Textiles Export Promotion Council.
The UAE is India’s biggest export market. However, more than actual exports, the worry in India was about uncertainties over payments from the UAE and the creditworthiness of its importers.
Gupta said synthetic textiles exports were worth Rs 16,000 crore, with the share of Abu Dhabi and Dubai — which were points of transit — being 25 per cent
The gems and jewellery sector also hoped that the bailout would revive the demand for luxury items in West Asia and other African nations. Dubai is the transit point for items meant for these regions.
Rajiv Jain of Jaipur-based Sambhav Gems, who is also the vice-chairman of the Gem and Jewellery Export Promotion Council, said any crisis adversely impacted the buying power of people.
The crisis will affect gems and jewellery makers because consumers in Dubai will buy less. The emirate is one of the major markets for gems and jewellery.
During the first half of this fiscal, the UAE was the No. 1 market for Indian goods, with a 13.1 per cent share in merchandise exports, piping the US to the second spot whose share was 11.4 per cent.
Though the crisis had not affected Indian exporters much, Fieo president A. Sakthivel said, “the bailout is a positive sentiment.”
According to him, realty and construction, which have exposure to Dubai, will also benefit from the bailout.
“The remittances by Indians from Dubai, which could have been affected if the crisis had spread to other sectors, would now be contained.”
State-run Dubai World had recently announced that it would need to restructure its debts, estimated at $59 billion, to pre-empt default and asked creditors for a six-month deferment.
Source : telegraphindia.com