Guest guest Posted March 25, 2003 Report Share Posted March 25, 2003 LITTLE IMPACT ON INDIA, SAYS SSB REPORT (as compared to other emerging economies of Asia) March 25, 2003 3:39am The Gulf war-II is likely to have limited impact on the Indian economy as compared to other emerging economies of Asia, according to a research report commissioned by Salomon Smith Barney (SSB). The report notes that India has comparatively a closed economy. In India, oil constitutes 25 percent of the total import bill. The country imports almost 70 percent of its crude requirements. Increase in crude price by $1 will result in rise in import bill of India by $500 million. At present, India nevertheless has forex reserves of over $70 billion, exclusive of gold. Forward purchases of the Reserve Bank of India have stood at $2.9 billion. India is consequently in a position to meet cost of increased oil prices, even if the war extends for a long period. The war will not significantly affect the rate of inflation in India. Inflation could rise by 170 basis points from the current level of 4.9 percent if oil prices go up by $10 per barrel. There will not be any marked negative impact in the balance of payments position either. The foreign direct investments and portfolio investments may decline just marginally. Worker remittances, which are presently not substantial from the Middle East, may be affected temporarily. Publication: India Business Insight Distributed by Financial Times Information Limited - Asia Africa Intelligence Wire Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.