India says Chinese currency depreciation “worrying” for exports
Later, briefing newspersons, the commerce minister said the suggestions from the state governments included strengthening of infrastructure, extending benefits to exporters and restoring the facility of ASIDE. China’s central bank has devalued its currency by 0.51 per cent to 6.5646 per cent against the dollar, the lowest since March 2011. While it has been making a case for having greater market access in the neighboring market for products including agricultural products, IT sector and pharmaceuticals, China has been resisting the attempts. However, the devaluation of the yuan will make imports cheaper from China to India.
Asked if India is preparing any kind of action plan to deal with Chinese imports, the minister said issues would be tackled on a case-to-case basis.
The ministry is planning a meeting with Chief Economic Advisor Arvind Subramanian and Niti Vice-Chairman Arvind Panagariya to get the big picture on China in the context of steel imports as well as overall cheap imports coming into India. Our products are going to be more expensive.
Though the trade and commerce ministers of all the states were invited, only ten of them turned up.
Explaining that currency volatility the world over was a matter of “worry” because it affected export earnings, Sitharaman said the issue of imposing duties to check Chinese imports has to be examined item by item. There is a mechanism to ascertain whether Chinese imports were causing injury to the Indian industry and if such injury was established based on ground facts, then barriers could be erected in the form of anti-dumping duty or other measures.
The Indian steel industry has asked the government to fix a minimum import price on steel to check cheap imports.
India’s exports to the European Union in 2014-15 contracted around 4.5 percent to $49.3 billion, while imports fell over 2 percent to $48.8 billion.
On gems and jewelry industries complain that it is hard to compete in the global market because of 10 per cent duty on gold imports, the minister said that her ministry is in favor of relaxing restrictions on gold import duty in order to boost the gems and jewelry industry.