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Yuan devaluation poses threat to engineering exports, says industry body EEPC

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Wednesday, 12 AugustNew Delhi :In the wake of steep decline in Yuan, Indian engineering exports will further lose competitiveness against the Chinese goods, an industry body said on Wednesday.

“A steep depreciation of Yuan will deal a further blow to the Indian exports, which are battling a slowdown in most markets of the world, as the shipments from the country will further lose competitiveness against the Chinese goods,” Engineering Exports Promotion Council Chairman Anupam Shah said in a statement.

He further said, the impact of Chinese aggression on the export front is not a good news for India as in the last two days, the former has got itself the export advantage of 4%.

“In our engineering exports, we compete with the Chinese manufacturing industries face-to-face on a number of value added items. Further, the depreciation of rupee looks more of a knee-jerk reaction to China and we are not sure whether it is a trend line. Moreover, this much volatility is not good for exporters,” Shah said.

The exports of engineering goods have already contracted by close to 6% in the first quarter of this financial year, the exporters’ apex body said.

On the government’s decision to further increase customs duty on steel import, Shah said, “The move is ill-advised as it would push up the cost of manufacturing the engineering products and make them more uncompetitive. So, the engineering exports will take a hit from China as also from a high duty on steel, the mother raw material.”

PTI