India won't be affected much by Dubai: Pranab Mukherjee

Dubai's debt crisis will not affect India much, but the government is keeping a close watch and will act to prevent any fallout, finance minister Pranab Mukherjee said on Saturday.

"The impact cannot be much, as our stake is so small and the amount involved compared to the world economy is miniscule," Pranab Mukherjee told reporters in Chandigarh, where he was delivering a lecture.

"Watchful and effective intervention at the appropriate time can avert some immediate crisis," he said.

Indian stocks and the rupee were rattled on Friday after Dubai's woes stoked fears over corporate exposure to a key trading partner and that foreign funds would lose their appetite for risk.

The United Arab Emirates (UAE), of which Dubai is part, is the second-biggest export destination for India and accounts for 10-12% of India's inward remittances.

Mukherjee said the emirate's problems could force a return of Indian citizens, who make up more than 40% of the UAE's population.