Home / Knowledge / News / Apparel/Garments / Assocham backs falling rupee to boost exports
Assocham backs falling rupee to boost exports
18
Jan '16
Any depreciation in rupee on account of China-led turmoil in the global financial markets should only be welcome sign for India, or else Indian exports will suffer more at the hands of China and other emerging countries witnessing correction in their currencies, an Assocham paper titled 'Implications of Devaluation of Chinese Yuan' said.

"India should allow its currency to slide while the RBI should use ample foreign exchange reserves to defend the currency only if there is a rout situation. However, there is a distinct possibility that rupee could actually strengthen over the medium term”, it said.

It said India must also ensure that Indian exports need to get back their competitiveness even in the midst of global slowdown. The major challenge is coming from China in various forms with sizeable influence on the currency valuation.

According to the paper, the Yuan which has been devalued thirce in the last five months, will negatively impact Indian firms which have export exposure to China in sectors such as tyres, pharmaceuticals, steel and organic chemicals textiles due to a volatile change in terms of trade.

"The impact of this devaluation will depend on the time horizon....However, the short-term impact can be negative in some sectors which also include capital goods among others," the report noted. The devaluation will make Indian exports expensive to the neighbouring country, affecting the competitiveness.

“The biggest concern is the steadily deteriorating balance on the merchandise trade account with China," Assocham President Sunil Kanoria said.

The Yuan's latest round of devaluation can make India's trade imbalance with China even worse. In any case, the deterioration has been rather steady and secular in the last few years with exports to China dropping. With a sharp reduction in prices of primary commodities which India exports, the export value is bound to decline in a disproportionate manner to imports since the inward shipments comprise capital, telecom and manufactured goods.

In 2014-15, the trade imbalance at $48.5 billion increased by over a third from $36.2 billion in the previous year. “This large trade deficit is essentially a reflection of India's inability to penetrate the Chinese markets, a problem that seems to have aggravated over the past three years".

In 2011-12, India's exports to China were valued at $18 billion, but in 2014-15, the value of exports dropped to below $12 billion.
"Going forward, the situation does not look good; rather it has deteriorated with the Chinese demand for primary goods declining and crash in prices", the Assocham paper said.


Must ReadView All

Courtesy: BekaertDeslee

Textiles | On 23rd Oct 2017

BekaertDeslee to expand North American facility

BekaertDeslee, one of the largest manufacturer of mattress textiles...

Courtesy: A&E

Textiles | On 23rd Oct 2017

A&E unveils Magic using Repreve sewing thread

American & Efird (A&E), a leading developer of industrial and...

Courtesy: Messe Frankfurt

Textiles | On 23rd Oct 2017

Over 4,000 exhibitors attend Intertextile Shanghai 2017

Another successful Intertextile Shanghai Apparel Fabrics has wrapped...

Interviews View All

Headhonchos
Indian textile value chain

Adopt innovative techniques, go for automisation rather than being...

Kamlesh Vaghela
RK Textiles

Very few machinery manufacturers have R&D units

Manfred Mentges
Sedo Treepoint GmbH

We see a higher demand in colour management systems, as customers see big...

Vikas Banduke

Softech Controls Private Limited (SCPL) is a part of the Cotmac Group, an...

Harsh Shah

Established in 1956 with a small beginning, Embee today manufactures a...

Suresh P Bagrecha

Komal Texfab, founded in 1981, is into manufacturing of knitted fabrics,...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

October 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
76.1%
No
12.7%
Skip
11.3%

Total Votes: 71

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
62.0%
No
28.2%
Skip
9.9%

Total Votes: 71

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
85.9%
No
9.9%
Skip
4.2%

Total Votes: 71

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
76.1%
No
11.3%
Skip
12.7%

Total Votes: 71


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search