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US shutdown: How it will affect India

US shutdown: How it will affect India

The exports to the US, the Indian currency and the markets are most likely to be affected from the shutdown in the US.

Suhasini Haidar
  • CNN-IBN
  • Last Updated: October 5, 2013, 1:16 PM IST
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The Democrats and Republicans failing to agree on President Barack Obama's signature healthcare law left thousands of federal workers on furlough and museums and national parks across the country closed.

The political impasse entered its fifth day on Saturday raking up concerns regarding the impact of the shutdown around the world.

The exporters in India are jittery about their future as their exports to the US will take much longer to be cleared there because the port workers will be part of the shutdown. This would lead to heavy demurrage charges for the exporters.

India annually exports nearly 36 billion dollars to the US which is about 12 to 14 per cent of it's total export.

The second major concern for India is that the rupee that has been strengthening in the past few days after going through a downfall might be affected again if the shut down continues.

The markets also might take a hit over the global mood as it had dropped over 600 points when the Syria crisis had come up.

The shut down will also have an effect on the Indians who wish to go abroad as the visa process will be delayed. As per the records, over 7,00, 000 people had visited US in 2012.

The silver lining for India amidst the US crisis is that the outsourcing industry has no threat from the shutdown because the US administration has made it difficult for federal government contracts to be outsourced.

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