India yet to draw up plan to deal with significant fallout in Greek economy, says Finance Secretary

New Delhi(Reuters): India is monitoring developments after the breakdown in talks between Greece and its creditors but does not have a firm plan in place to deal with any significant fallout, Finance Secretary Rajiv Mehrishi said on Monday.

Thousands of protesters gather in front of the Greek parliament in Athens, on June 29, 2015. Some 17,000 people took to the streets of Athens and Thessalonique to say `No` to the latest offer of a bailout deal, accusing Greece`s international creditors of blackmail. AFP

Thousands of protesters gather in front of the Greek parliament in Athens, on June 29, 2015. Some 17,000 people took to the streets of Athens and Thessalonique to sayNoto the latest offer of a bailout deal, accusing Greeces international creditors of blackmail. AFP

Worries over Greece sparked a sell-off in emerging markets on Monday. In India, the NSE share index fell as much as 2.2%, while the benchmark 10-year bond yield hit its highest since May 22.

“This a dynamic and evolving situation. There is no firm plan that we can access,” Mehrishi told reporters. “Nobody can predict what the exact situation would be.”

Mehrishi added the government was in touch with the Reserve Bank of India (RBI) to deal with any situation.

RBI Governor Raghuram Rajan said last week he expected India’s economy would be able to withstand any impact from the crisis in Greece thanks in part to its foreign exchange reserves, which reached a record high of $355.46 billion as of June 19.

Mehrishi said on Monday the fallout from Greece would not have a direct impact on India but that flows would be a potential concern.

“If yields on euro bonds go up, then it might impact inflows and outflows from India,” he said.