Exporters relieved at end of US shutdown

Exporters relieved at end of US shutdown

The export community has cheered the end of US government shutdown triggered by disputes over raising that country’s debt ceiling.

The US is India’s second biggest export destination and a deadlock would have had a crippling effect on India’s outward shipments.

“The end of the US fiscal crisis has come as a big relief to global trade since any more prolonging of the deadlock would have had a crippling effect on Indian exporters who depend the most on the American market,” the Engineering Export Promotion Council (EEPC) Chairman Anupam Shah said on Thursday.

“With over $36 billion of exports in 2013, the US is India’s second biggest export destination in terms of country-wise ranking. Any disruption in the US, particularly in the all-important financial markets resulting from the political crisis, would have led to recession in the world’s largest economy. Like most other countries, that would have been disastrous for India’s exports, which have recently started looking up,” Shah said.

The EEPC Chairman, however, said the Indian exporters need to continue diversification of their trade so that, in a highly volatile global markets, the downturn risks could be well-spread. That is the lesson from the present US crisis.

For the foreseeable future, at least, exporters can hope to go full steam on their Christmas business, Shah said.

He said that while the shutdown of the US government did not directly affect the exports, the sentiment was low and its continuation would have crippled world trade.
India Inc expressed similar sentiments.

 The PHD Chamber of Commerce stated that recovery in the US economy is critical to revival of growth in the world economy as the US is a major exports destination for many emerging economies such as India.

US President Barack Obama on Wednesday signed the debt deal to end the 16-day government shutdown and increase the current debt ceiling of $16.7 trillion to prevent the country from careening into a debt default situation with potential cascading effects on the world economy.

The deal, however, offers only a temporary fix and does not resolve the fundamental issues of spending and deficits. It funds the government until January 15, 2014 and raises the debt ceiling until February 7, 2014.

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