The unrest in Iraq is taking a toll on Indian exports to the country, especially of engineering and project goods, with shipments and payments getting stuck.

Engineering exports to the strife-torn country dropped by more than half to $9.14 million in May 2014 compared with $20 million in the same month last year, according to a statement by the Engineering Export Promotion Council.

Other export items that have been hit include pharmaceuticals, medical devices and chemicals. Exports of engineering goods to Iraq in the first two months of the current financial year have dropped 23.49 per cent to $28.65 million from $37.49 million in the same period last year.

“There is a clear negative growth of our exports to Iraq. When the country is in the middle of war, it is understandable that economic activity is in complete disarray. Since engineering items are not of day-to-day use for the Iraqi people, it gets hit more,” EEPC Chairman Anupam Shah said.

The war has not only disrupted shipments but also brought the entire payment system to a halt, Shah said.

Since total exports to Iraq is only $1 billion, compared with total Indian exports of over $300 billion, the unrest will not have a marked negative impact on overall exports, pointed out Ajay Sahai, Director General, Federation of Indian Export Organisations (FIEO).

FIEO is hopeful that the on-going unrest would soon be arrested as Iraqi forces have started getting the better of the militants. “We are hoping that the situation would improve soon,” Sahai said.

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