Dubai: Allaying fears of an exodus of migrant workforce and large scale job losses, India’s consulate on Sunday said the Dubai debt crisis had no direct impact on the country and there was no need to panic.
“We are confident the government of Dubai and the UAE are fully capable of handling the short-term crisis faced by Dubai World,” said India’s consul general Venu Rajamony.
The UAE government-owned holding company Dubai World seeking extension of repayment of debt amounting $59 billion till May next year has spooked worries that it may soon lead to large scale job losses in the region and an exodus of workforce back to India.
Rajamony said the decision on seeking extension of repayment is not going to lead any sudden job losses of Indians or an exodus back home.
Million of workers from India are employed in reatly and other sectors in Dubai and other Middle East cities and their families are dependent on remittances. Indians form 42.3% of the population of Dubai.
Finance minister Pranab Mukherjee on Saturday said the crisis will not have “earth shaking” impact on the economy. “The full impact of the Dubai debt crisis is yet to be assessed, but there is no need to press the panic button.”
On the issue of the large number of Indians working in Dubai, he had sounded confident, “I don’t think it will have much effect on Indian workers in that country.”
Indian businessmen and analysts on the ground also said the world was overreacting to the crisis.
“Dubai’s position as a key partner of India in the region remain as it is and the world class infrastructure and the friendly business environment they have created as well as Dubai’s geographical location which makes it convenient hub for India are advantages which are not going to change,” said Rajamony.
Local Indian businessmen said it is too early to judge the impact on remittances, redundancies and other business activities. Managing director of Xpertize United and a board member of the Indian Business Professional Council (IBPC) in Dubai Navin Kapoor said there would be hardly any impact on India.
“The exposure of Indian financial institutions to Dubai World is being assessed at this point in time but in my opinion it will have practically no impact on India,” he said. “There is no reason to panic on this issue,” he added.
Indian banks on Friday said that they have an exposure of Rs5,000-6,500 crore in the Middle East city, but are not worried and the crisis might not have a major impact on their balance sheets.
Bank of Baroda, the largest Indian lender in the United Arab Emirates, said it has an exposure of Rs5,000 crore in Dubai. India’s largest lender State Bank of India has an exposure of around Rs1,500 crore in United Arab Emirates, including Dubai. Dubai World has significance presence in India as its arm DP World is associated with at least six ports in the country. The shipping ministry had said it had sought details from the these ports to assess the impact of the crisis.