Indian exporters to bear burns of US bankruptcies: D&B

MUMBAI: Indian exporters will have to bear the burns of bankruptcies with the worsening financial crisis in US, heading towards recession.

In this scenario, it comes as no surprise that the number of companies filing for Chapter 11 and Chapter 7, under Federal bankruptcy laws, has gone up considerably.

According to a Dun & Bradstreet research report, the Chapter 11 filings for commercial businesses has increased from 3,600 in 2006 to an estimated 6,700 in 2008, registering a 84 per cent rise. Chapter 7 filings have increased from 11,400 to an estimated 25,000 during the same period, a rise of 116 per cent.

US is the single largest export destination for Indian exporters that accounts for about 13 per cent of the total Indian exports in FY 2008.

Considering the magnitude of trade transactions and the current economic environment in the US, it has become even more imperative for Indian businesses especially exporters to exercise abundant caution in all cross-border transactions, says D&B.