Dubai crisis may hurt some sectors in India: report

The Dubai debt crisis triggered by the collapse of Dubai World may cause significant damage to exports, inward remittances and the real estate sector in India, besides resulting in build up of asset bubbles in Asia, HDFC Bank said in a research report.

The report is at some variance from the view of the government that the impact of the crisis on India will be marginal.

Information technology companies and some other exporters have echoed this view, which has also got cautious acceptance from the Reserve Bank of India.

The HDFC report says, "The ongoing crisis in Dubai will impact specific pockets of the domestic economy, and what may seem negligible at an international level may translate to significant damage for specific segments of the economy." It however adds that the core industrial growth is likely to remain insulated.

The likelihood of a sovereign default may also poses risks of asset bubbles building up in Asia - China in particular - and should act as a wake up call to financial markets, the leading private lender said.

Following the crisis, the Reserve Bank had asked Indian banks to give an account of their exposure to Dubai, a key financial hub where lakhs of Indians work. (See: Dubai crisis won't hurt India much, says government)