The initial reaction in India was that of indifference at first and the official view was that India was insulated from the crisis. However, it later changed to that of concern after the rupee had a free fall by 12 per cent against the dollar. But it was not alarming as compared to the depreciation of ASEAN currencies by as much as 40 to 75 per cent.

According to the chamber note, the crisis is expected to aggravate the already sluggish Indian economy, slow industrial growth and further depress capital markets.

There has been a real total cut down in India's exports of yarn in the first three months of 1998. The textile and garment exports have been severely affected as the south-east countries have not only been importersof Indian garments and textiles, but also India's competitors in exports to Europe and elsewhere. A much steeper depreciation in their currencies had made their textiles cheaper and hence reduced India's share in the market.

Impact on the cement exports would been felt in the next two years and it would register a modest 10 per cent growth as compared to 40 per cent growth in the past year. According to a study by SBI Caps, the crisis has rendered south-east exports more attractive. This coupled with dwindling domestic demand will adversely affect export earnings. Gujarat Ambuja, the country's largest cement exporter, faces a dip in its earnings by 4 per cent.

The crisis has affected the Indian electronics sector too. The largest manufacturers of colour picture tubes (CPTs) are located in the Far East and with the currencies of Korea, Malaysia and Thailand having gone down dramatically in value against dollar, the landed cost to the customers in India in dollars has gone down by at least 10 to 12 percent in last three months.

This is because the manufacturers in these countries are trying to export all that they have in the pipeline and India seems to be a soft target on account of its opening up of imports and reduced custom duties, the note states.

This is not only damaging to the Indian CPT industry in the short-term, but it would also have a long-term fall-out, as with these prices the domestic industry would become more uncompetitive and may be pushed to the brink.Some of the south-east companies such as Samsung, LG, Daewoo, Sony, Panasonic, Sharp and Akai already have a presence in India and are expected to slash the prices of their products.

Understandably, most of them are at present depending mainly on CKD/CSD imports for their manufacturing in India. Hence, they would be able to exploit their cheap imports to their advantage. Since the anti-dumping mechanism in India is not able to check the dumping of these products, it would further hurt the domestic electronic industry, PHDCCI says.Inthe automobile sector, the crisis would directly affect two major projects in Tamil Nadu -- Renault and Texmaco -- and that of Korean tyre major Kumho which would now be delayed by at least six months.

Similarly, gypsum board industry, rice, leather and solvent extraction industries have also been affected on account of cheaper imports from the region.Tourism will be affected as the tourists to India from these countries had significantly increased in last five years. But devaluation in their currencies will make their travel to India unattractive. At the same time, these countries have become extremely attractive destinations, thus further eroding India's incoming traffic, the note says. u