New Delhi - India, the third-largest Asian economy, will not be affected by the debt woes of Dubai World, a government investment company of the Gulf emirate, Indian Finance Minister Pranab Mukherjee said Saturday. Dubai earlier announced that it had asked creditors for a six-month extension on debt repayments by the company which owns several businesses including property firms.
This had sparked fears of a potential default and an alarm across the globe over the exposure of banking companies to the debt.
Speaking to reporters in the northern Chandigarh city, Mukherjee insisted there would be few repercussions the Indian economy since Indian realtors were not among the major players in Dubai.
"There is no need of pressing the panic button. First the amount involved is small. Secondly the exposure to the Dubai financial system of Indian banking systems from the viewpoint of direct foreign investment, exposure is limited," he said.
But despite the government's optimistic outlook, the Indian real estate industry remains worried. Dubai World's debts total 60 billion dollars of the total 80-billion-dollar debt of the state.
Mukherjee said there could be some adverse impact initially which was reflected when the Indian markets slid by nearly 4 per cent on Friday. But the markets recouped losses later, with the benchmark Sensex index closing trade with a 1.3 per cent loss.
