Exports To Face Adverse Impact With Devaluation In Yuan
Due to recessionary conditions in global markets, Indian Textile Exporters are already facing slow progress and further to have an adverse impact with the sudden move on the part of China to devalue its currency yuan, an industry body has said.
China’s central bank on Tuesday devalued its tightly controlled currency by close to 2% to boost exports amid a slowdown in the world’s second-largest economy and the recent stock market crash.
Even as global exports are on a sliding path, this decline in global demand is putting pressure on the export-driven Chinese economy.
Texprocil chairman, R K Dalmia pointed out that the Chinese government appeared to be more sensitive to the decline in their exports than the Indian government as they had acted with alacrity to arrest the decline in their exports by taking urgent steps like devaluing their currency.
Indian government, on the other hand, regrettably has been unable to appreciate the depth of the decline in exports and take remedial steps, Dalmia said.
He pointed out that the government has not yet announced the interest rate subvention of 3 per cent, which has been pending despite sanction of funds for this purpose by the finance ministry.
Dalmia appealed to the government to clear the dues of the industry under the TUF scheme and release additional funds. These steps would enable the textile sector which has a very low operating margin to survive, in the crisis situation faced by the textile industry.