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Indian exporters are breathing easy now that the US Senate has finally broken its political deadlock over debt ceiling that had brought the American Government’s activities to a grinding halt.
While shipments to the country’s second largest export market had not taken a hit due to the Budget impasse, exporters were apprehensive that a continuation of the shutdown could have affected business sentiments, deflated demand and also hampered payments by banks in the future.
“Our exports to the US have not been adversely affected due to the Government shutdown over the past two-three weeks. But things would have certainly got strained had the deadlock continued,” said Federation of Indian Export Organisations President Rafeeque Ahmed.
Ahmed said that a continued impasse would have adversely affected the sentiments of the entire American business community and consumption pattern in the country, too, would have been affected due to a rise in unemployment.
“The long-term fall out of the American political crisis would indeed have been grave and we are thankful that it is over before we got affected,” Ahmed said.
The US Federal Government partially shutdown on September 30, for the first time in 17 years, after a Budget stand-off between the Republicans and the Democrats over President Barack Obama’s health insurance law.
Any disruption in the US, particularly in the all-important financial markets resulting from the political crisis, would have led to recession in the world’s largest economy which would have been disastrous for India’s exports, said Engineering Export Promotion Council Chairman Anupam Shah.
Engineering exports have just started looking up after several months of decline, and the US is a big market for the sector. “While the shutdown of the US Government did not directly affect exports, the sentiment was low and its continuation would have crippled world trade,” Shah said.
India’s exports to the US in 2012-13 were $36.15 billion, just marginally behind shipments to the country’s top export destination UAE at $36.31 billion.
Commerce Ministry officials said that the Ministry had not felt the need to intervene as Indian exports were continuing unhindered to the US.
“Since trade is basically taking place between private players, the impasse did not affect it. However, we were watching the situation and would have intervened if necessary. We are glad that a deal has been brokered between the Democrats and the Republicans,” a senior official told Business Line .
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