Federal govt. shutdown may affect India’s exports to U.S.

American economy among the largest destinations for the country’s exports

January 21, 2018 09:48 pm | Updated 10:02 pm IST - New Delhi

On notice:  With many staff on furlough, port operations   would be hit, says Ravi P. Sehgal.

On notice: With many staff on furlough, port operations would be hit, says Ravi P. Sehgal.

Indian shipments to the U.S. are likely to get affected following the shutdown of that country’s Federal Government, exporters said.

“The shutdown of the U.S. Federal Government is certainly a bad news for the Indian exporters since the American economy is among the largest destinations for (India’s) exports,” said Ravi P Sehgal, chairman, EEPC India — the apex body for Indian engineering exporters.

“For the (India’s) engineering sector, the U.S. is the number one export destination, giving a robust growth in the current financial year. Between April-December period of the current fiscal, (India’s) engineering exports to the U.S. grew by over 50% to $7.5 billion,” Mr. Sehgal said in a statement. With as many as 60,000 employees of the U.S. Commerce and Transportation Departments being furloughed (placing an employee in a temporary non-duty, non-pay status in this case because of lack of funds), port operations as also the clearing (of shipments) would be hit, he said. The shutdown, the first since October 2013, followed U.S. lawmakers not being able to come to an agreement on immigration and border security-related issues.

Funding approval

According to reports, Federal government employees had been asked to work without salary or stay home till new funding was approved.

India’s exports to the U.S. in April-October this fiscal were $27.09 billion or 16.27% of the total exports of $166.46 billion in the period. In 2016-17, exports to the U.S. were $42.2 billion, or 15.3% of the overall exports of $275.85 billion. With imports of $22.3 billion from the U.S in the last fiscal, the trade balance to the tune of $19.9 billion was in India’s favour. The U.S. was the topmost country with which India has registered favourable trade balance during FY’15, FY’16 and FY’17, according to information given by Commerce and Industry Minister Suresh Prabhu in a written reply in Rajya Sabha.

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