Dubai crisis not to hurt India much, says government
28 Nov 2009
The finance ministry today said it did not expect the Dubai debt crisis to impact remittances from that country to India, or affect the real estate sector in the country
The Reserve Bank of India echoed this view, but added that it was studying the developments, and would ask banks to furnish details of their exposure to Dubai World, the state-run investment company at the centre of the crisis.
The Dubai government announced Wednesday that it was requesting creditors for a ''standstill'' on paying back until May 2010 some of the $60-billion debt of Dubai World and its real estate arm, Nakheel. The default request sent shockwaves through the financial world. Nakheel has a roughly $3.5 billion Islamic bond due in December. (See: Bank stocks tumble as Dubai seeks moratorium on debt)
On Friday, commerce minister Anand Sharma said the risk of a debt default by Dubai World, ranked among the largest state-run conglomerates in the region, would have little impact on the Indian economy.
"India is a very large economy. It's a resilient economy. I don't think some development in real estate in Dubai will have an impact on the Indian economy," he told reporters in New Delhi.
"As far as India is concerned, the housing, real estate sector and construction industry are all doing well. This is confirmed by the increasing demand for construction materials, cement and steel," Sharma added.