In a shutdown, most government workers except the ones employed in the most critical services like air traffic control, police and prisons, will be put on unpaid leave. The last time it happened was in 1995-1996 when the shutdown lasted 28 days. The US came close to repeating it in 2011.
As many as eight lakh US workers may not get their pay due to the shutdown. US military personnel are also likely to see their salaries delayed. Almost all employees of space agency NASA will be put on unpaid leave except a few, who would continue to work in critical mission control systems.
Indian exports to the US face the demurrage threat due to shutdown, engineering exporters' body EEPC India said, according to a PTI report."Commercial ports do not come under emergency service category, so there will be a delay in port services like clearing of goods from ports due to staff shortage. This may result in huge demurrage for exporters," the report quoted EEPC India chairman Anupam Shah as saying.
Indian exports to the US account for 12-14% of the total outbound shipments worth $300 billion, Shah said. In 2012-13, exports to the US came to $36 billion.
"Most of the work that Indian IT firms do for the US government are at the local level - counties, districts and state government accounts. The exposure is minimal and many federal contracts can't be handled by overseas companies any way," said Pradeep Udhas, partner at the consultancy firm KPMG. He said that long-term effects, if the situation persists, are difficult to predict.
HCL Tech's global HR head Naveen Narayanan also said the government accounts that the company handles in the US are with state governments and won't be affected by the shutdown.
Industry association Nasscom isn't too worried either. In its statement, it said that "a majority of the business that our industry has is with the private sector, and is not directly dependant on federal spending. Hence, we do not see an immediate economic impact. If however the shutdown continues for an extended period, there will be an overall macroeconomic impact that may affect the industry". Nasscom, however, cautioned that "some services such as visa processing time that depend on federal budgets are expected to see delay s."
IT industry analyst Ankita Somani at the brokerage firm Angel Broking, said Indian IT firms won't be affected and there won't be any change in the profitability or earnings of the companies.
"Even long term, the effects on the industry would be more due to other economic factors at play rather than the direct impact of shutdown," she said.
via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNE80K-flQYRBIbTqZP_1MuyAc9ALA&url=http://timesofindia.indiatimes.com/business/india-business/No-impact-on-IT-exports-may-face-port-hurdle/articleshow/23379749.cms
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