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Greece crisis may hit India
With Greeks\' rejection of rescue package from creditors spooking markets, the government asserted that India is well insulated from the crisis but rupee may be affected due to the outward flight of investment. The crisis is unlikely to impact the financial system due to the limited commercial bilateral engagement and the country\'s own strong fundamentals, policy makers and other stakeholders maintained on Monday.
India well insulated, assures Centre
New Delhi: With Greeks' rejection of rescue package from creditors spooking markets, the government asserted that India is well insulated from the crisis but rupee may be affected due to the outward flight of investment. The crisis is unlikely to impact the financial system due to the limited commercial bilateral engagement and the country's own strong fundamentals, policy makers and other stakeholders maintained on Monday.
"This is a drama which is going to play out for some time. We are well protected in at least three ways. Our macro- economic situation is much more stable. We have forex reserves. We are an economy which is still a very attractive investment destination. So, I think we are relatively well insulated," Chief Economic Advisor Arvind Subramanian told reporters here on Monday.
Greeks had on Sunday rejected a rescue package from its international creditors, throwing the future of the country's Eurozone membership in doubt. "As for the crisis itself, it is going to going to be long and prolonged. Tomorrow is a big meeting of the German and the French head of the states. Let's see, it is up to Europe to respond," he said.
On the likely impact of the crisis on Indian economy, he said, "In these situations what mostly happens is there is flight to dollars, to a safe haven. Rupee might also be affected by that. But nothing gets unusual at all so far." Finance Secretary Rajiv Mehrishi said government is closely monitoring the situation as India may be indirectly impacted. "We will have to see how the euro moves now. We are closely monitoring the Greece situation.
The crisis might impact India indirectly," he added without elaborating. Meanwhile, the software industry body is of the firm belief that the on-going Greek crisis will not have any adverse impact on Indian software industry as its exposure to Greece is very limited. “There is no impact of Greek crisis on Indian software sector in short term as the exposure of India to Greece is very very limited at this point of time,” B V R Mohan Reddy, Chairman, Nasscom and Executive Chairman, Cyient, told The Hans India on the sidelines of an event in Hyderabad on Monday.
Reddy however said that there will some implications in the long-term if Greece exits Eurozone. “If Greece goes out of EU (European Union), then we will have challenges in terms of Euro currency. In the case, there will be long-term impact and implication in terms of foreign exchange. Otherwise, we don’t see any implication,” he explained.
