The Centre on Friday reacted cautiously to the developments in Dubai asserting that the financial crisis in the Gulf country would not have much of an impact on the Indian economy including real estate and exports.
However, it was closely watching the situation.
The RBI may ask all banks to disclose their exposure in the Dubai World, the government investment company with liabilities of $59 billion. The firm has sought rescheduling of its debt repayment.
Union Commerce and Industry Minister Anand Sharma told journalists: “The Indian economy is large and I don’t think developments in the real estate sector in Dubai are going to impact it. Besides, the Indian real estate is doing well,” he said.
The United Arab Emirates is one of India’s largest export destinations with shipments of about $24 billion in fiscal 2008-09.
The Finance Ministry said the crisis, triggered by a slump in real estate, may not impact remittances sent by Indian expatriates in the Gulf. “Remittances from expats didn’t suffer during the period when the larger crisis was on. So whether this should have an impact in terms of employment, in terms of salaries and therefore in terms of remittances is somewhat unlikely,” Finance Secretary Ashok Chawla told journalists here. India gets nearly a quarter of its total remittances from the UAE.