New Delhi: Commerce and Industry Minister Nirmala Sitharaman on Friday said the devaluation of the Chinese yuan is a concern because it will make Indian exports expensive and widen the trade deficit with China.
“The depreciation of the yuan is definitely going to make imports from China cheaper…but the fact is my deficit with China will also grow,” she told media persons here following the first meeting of the Council for Trade, Development and Promotion.
“It is going to make imports from China even cheaper. Our products are going to be more expensive. So, that is an immediate black-and-white kind of a situation which is developing.
“So, China wants to push goods into different countries, particularly India, and that would become even cheaper with the currency devaluation,” she added.
China further depreciated the yuan on Thursday, leading to regional currencies and stock markets tumbling as investors feared China’s moves could trigger competitive currency devaluations from trading partners.
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.
“All imports from China cannot be handled as one. We have to see each item by item, which are causing injury to our manufacturing…then some anti-dumping duty can be levied,” the minister said.