The global currency market is witnessing huge swings with some of the Asian currencies such as the Chinese yuan falling sharply to a five-year low after Brexit. The fall in yuan has started hurting Indian companies which are competing with Chinese firms globally.

Speaking to Bloomberg TV India , Kiri Industries Managing Director Manish Kiri says rupee depreciation on similar lines will help Indian companies stay competitive in the global market.

How has the yuan depreciation impacted Indian companies? Indian dye companies had enjoyed some benefits after the closure of a few big Chinese units. Do you feel the yuan fall will offset some of the competitive edge?

In the overall chemical sector, we fall into speciality chemicals. Speciality chemicals have been less impacted than basic chemicals. Weakening of the yuan would make Chinese products more competitive. They are also suffering from low demand in China and globally. That will also result in more dumping from Chinese enterprises. And if Indian rupee also becomes competitive, it may help Indian companies safeguard their export markets. I see less chance of these products getting dumped in India as some of these basic chemicals are subject to anti-dumping duties. But it would definitely make Indian companies less competitive for exports and markets outside India.

We have seen the adverse effects of dumping on other industries such as steel. What is the quantum of imports from China in the dye sector?

The import is less than 2 per cent of the total market size because Indian companies are good enough to serve the domestic market. Certain categories of dyes such as disperse dyes and some intermediates, which are raw materials for dyes, are getting imported in larger quantity. And those products can get impacted as India does not impose anti-dumping duties on them currently. India’s exports of dyes and intermediates are close to ₹30,000 crore while imports are much less at about ₹4,000 crore. So if you look at this specific industry, the import segment is smaller compared with our net export.

Can you shed some light on the import of intermediates?

H-acid and vinyl sulphone are produced in India and are exported to China. So there is a reverse trend for these two products. That is one of the reasons that Indian prices are holding up at a high level. But other naphthalene intermediates are being imported regularly as India doesn’t have much production. Most of the units which were making these products closed down 10 years ago. So those products would be subject to more imports at lower prices from China.

With the yuan falling and other currencies also extending losses, do you feel rupee depreciation will help Indian companies?

Absolutely. If the rupee depreciates to similar levels, it will help Indian companies stay competitive in the global market.

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