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US shutdown: Indian IT sector sees no immediate impact

US shutdown: Indian IT sector sees no immediate impact

New Delhi: The shutdown of the US government after the Republicans and the Democrats failed to strike a deal on spending and budget is bound to hit Indian exports, industry bodies like the Associated Chambers of Commerce and Industry of India (Assocham) and the Engineering Export Promotion Council (EEPC) said on Tuesday.

"The shutdown of the US government will certainly hit Indian exports because of crippling of the trade facilities at the ports and airports," Assocham president Rana Kapoor said.

The US is literally too big to fail for the rest of the world, whether we like it or not, he added.

The US government shutdown on Tuesday - for the first time in nearly 18 years - as the Republicans and the Democrats failed to strike a deal on spending and budget mainly due to their differences over 'Obamacare' - the flagship healthcare programme of President Barack Obama.

With neither side blinking, despite last minute hectic efforts from both side, the White House immediately ordered the federal government agencies to begin shutting down, furloughing thousands of workers and curtailing some services for the first time since 1995-96.

"The shutdown is a very bad development for Indian exporters who will face problems while doing business transactions. Trade facilitation activities like ports, cargo, regulatory clearances may get affected and result in holding up the landed cargo there," engineering exports body EEPC India said.

Moreover, in the absence of the essential trade facilitation, buyers may put on hold the new orders. The US is among the top buyers of Indian goods and services, it added.

"The shutdown has come at a time when Indian exports were showing some signs of recovery and there were indications of the American economy shaping up again after five years of struggle following Lehman Bros collapse in 2008," EEPC said.

This shutdown means that national parks will close, most routine food inspections will be suspended, paperwork will slow at government offices and many federal employees will be furloughed.

"It is not only in India but also in America that political parties are polarised to extreme positions to the detriment of the common people, industry, trade and business," Mr Kapoor said.

Only emergency and essential services will be able to operate, as a result of which lakhs of government employees would not receive their salary for the shutdown duration.

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