US govt shut-down keeps Indian exporters on tenterhooks

With the US government shut-down remaining in effect on Monday and efforts on in full swing to reach a temporary truce, Indian exporters are keeping a close watch on the developments.

They fear that a failure to reach an agreement on the crucial issue of immigration between lawmakers could affect shipments in the days to come.

While exporters are hopeful that a vote to end the shut-down with a short-term spending bill for three weeks will take place as scheduled on Monday, only a long-term solution would put minds to rest.

“If the disagreement amongst US lawmakers on immigration is not sorted out and a situation similar to the October 2013 shut-down gets replicated, Indian shipments to the US will definitely get affected. Although we are given to understand that about 90 per cent of the workforce in the US customs and border protection will work, there might be disruption in other allied services that would lead to delays of our consignments and possible demurrage charges,” said Ajay Sahai from the Federation of Indian Export Organisations.

The current uncertainty in the US is due to the Democrats not agreeing to support a temporary funding Bill to keep the government open as they are unhappy with the Trump administration’s decision to end the Deferred Action for Childhood Arrivals (DACA), which gives legal protection to a category of young immigrants called the ‘dreamers’.

Senate Majority Leader Mitch McConnell, on Sunday night, promised to bring immigration legislation up for debate after February 8 so long as the government remained open.

The Democrats did not agree to a vote on ending the shut-down on Sunday night leading to the crisis continuing on Monday, but there is a possibility of the short-term funding Bill getting passed on Monday noon (US time).

The situation, however, may be back to square one if the immigration issue does not get handled satisfactorily in the weeks to come.

Engg goods exports

Engineering goods exporters, who have witnessed a surge in demand from the US recently, are apprehensive that the present situation could act as a dampener to export growth.

“We are apprehensive about the developments in the US. If the shut-down continues and essential services including ports get affected, our exports would get hit,” pointed out Suranjan Gupta from the Engineering Export Promotion Council (EEPC).