Dubai crisis not to impact India’s growth, says Montek

Deputy Chairman of Planning Commission, Montek Singh Ahluwalia

The Dubai financial crisis will not impact India’s high economic growth as the country’s exposure to the debt-ridden Dubai World is limited, said Planning Commission Deputy Chairman Montek Singh Ahluwalia.

“My understanding is that India’s exposure to Dubai World is very low. I don’t think that India’s high growth would be affected by Dubai crisis”, he told reporters here.

However, in case the impact of the crisis is big, Ahlwualia added, “it may have some impact on us.”

India recorded 7.9 per cent GDP growth rate in the second quarter, much more than anticipated by analysts or think tanks.

The financial crisis in Dubai began last week with conglomerate Dubai World asking for a six month delay on repaying its USD 59 billion debts.

Talking to reporters on Saturday, Finance Minister Pranab Mukherjee said, “the full impact of the Dubai debt crisis is yet to be assessed, but there is no need to press the panic button.”

Mukherjee had further said, “first of all, the amount is small and secondly, the exposure of our banking systems to the Dubai financial systems is limited.”

Meanwhile, Nakheel Development, real estate arm of Dubai World, requested for suspension of three of its listed Sukuk or Islamic bonds (Nakheel Development Limited, Nakheel Development 2 Limited, Nakheel Development 3 Limited) on Nasdaq Dubai.