Devaluation of yuan will affect India's textile exports

The devaluation of Chinese currency yuan will have an adverse impact on India's textiles exports and clothing, which is facing sluggish growth due to recessionary conditions in global markets, an industry body has said.
"The sudden move on the part of China to devalue its currency yuan will have an adverse impact on India's exports of textiles and clothing, which are facing already sluggish growth due to recessionary conditions in global markets," Texprocil chairman R K Dalmia said in a statement here.
China's central bank on Tuesday devalued its tightly controlled currency by close to 2 per cent 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.
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.
"Our government, on the other hand, regrettably has been unable to appreciate the depth of the decline in our 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.

In view of the crisis situation facing the textiles industry, 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 these times of global recession and intense competition, Dalmia added.