The major concern over the sudden strikes carried out by the US seemed to be centred around trading in some commodities about which inquiries had been received from West Asian countries. FIEO president P K Shah said: We have just started receiving import inquiries from Iraq and a gulf war at this stage will jeopardise all our efforts to promote exports to West Asia.
Besides tea, Iraq has of late been showing a lot of interest in importing rice from India and instability in West Asia will affect the country's export prospects, Shah added. He said exports will suffer if the Cruise missile attacks turned into a full-scale war.
Recounting the 1992 crisis, he said a number of Indian construction companies had started important projects in war-ravaged West Asian countries, which would also suffer reverses in course of any fresh hostilities.
Shah said it was too early to comment on possible consequences. West Asia is currently a focal area in the ongoing export efforts the government has undertaken to improve the country's fiscal situation.
After the 1991 Gulf War, a number of premier construction companies had bagged lucrative reconstruction deals in West Asia, especially in Iraq. These included Som Dutt Constructions and Ansal Constructions, two of the country's largest real estate firms based in Delhi.
A major problem for Indian exporters in case of disturbances in the Gulf is that leather exports suffer badly.According to a major exporter of footwear and leather handbags, a major chunk of Indian leatherware exports go via Dubai, the capital of the United Arab Emirates, and a war in the region will interrupt seaborne as well as airborne traffic.
A war in the Gulf can also create problems in cross-border financing of Indian exports to West Asia by non-resident Indians, since NRIs tend to remit their income and bank holdings to Indian banks back home, or elsewhere during a turbulence.
A large number of NRIs had in fact returned to India in the wake of the previous Gulf War, creating a void in cross-border financing of medium-scale exports and paring the market for Indian goods, since they form a large section of the consumers.
