Expressing concern over the devaluation of the yuan, Commerce and Industry Minister Nirmala Sitharaman on Friday said the Centre would assess the situation and take action on cheaper Chinese imports that would impact domestic products.

“It is a worrying development. It will make imports from China cheaper and our products more expensive, especially when there is excess capacity there,” she said, adding that it would also impact the trade deficit with China.

The Minister said she would soon be meeting with Chief Economic Adviser Arvind Subramanian and NITI Aayog Vice-Chairperson Arvind Panagariya to get a better understanding on the issue. The government, however, would not rush into any action, she said, adding that her Ministry has also consulted the Finance and Steel Ministries over the imposition of minimum export prices.

“Imports from China can’t be handled as one. We have to look at it item by item and what is causing injury to our manufacturing and then anti-dumping duty will be imposed,” she said.

Her comments come a day after China allowed the yuan to fall by its sharpest pace in five months leading to volatility in global markets.

Sitharaman also expressed concerns over currency volatility that impact earnings from exports, especially in markets like the Euro Zone.

Speaking to reporters after the first meeting of the Council for Trade Development and Promotion, she stressed that States must focus on service exports that have a lot of potential despite the low merchandise exports.

“There is a lot of scope to improve. Some sectors are still holding out well in these adverse conditions,” she said.

Underlining the need to diversify the services exports basket, she told the States that sectors such as medical tourism, nursing and healthcare, education and audio-visual media provide good potential that should be harnessed.

The meeting, which was aimed at discussing measures to improve trade, also flagged issues relating to export infrastructure and state government polices. Officials from Ministries including Finance, Civil Aviation and Environment and industry chambers also attended the over one hour long meeting.

Director-General of Foreign Trade Anup Wadhawan made a presentation on measures, especially by States, to improve exports.

Related Topics