To soothe nerves of various sectors of the Indian industry after China devalued its currency to boost exports Commerce Minister Nirmala Sitharaman said dumping of cheap imports will not be entertained and safeguard clauses will be invoked if warranted.
Faced with sluggish economic growth and dwindling exports, Chinese apex bank on Tuesday decided to devalue its currency, following which yuan has fallen by more than 4 per cent.
“With devaluation of Yuan twice, definitely our exports are going to face greater challenges, the Commerce Ministry is very seized of this matter,” she said.
Engineering and textile exports from India are expected to take a major hit with Chinese goods becoming more competitive, while steel firms fear that cheap imports from the neighbouring country could intensify further.
Stating that devaluation of Chinese currency was a “very serious issue”, she said it could lead to a situation where China will push more of its goods into markets like India.
Since value has been cut, the cost of products being exported from China will come down and it will come here cheap, she said.
“We are closely monitoring the situation, obviously dumping will not be entertained, where there is an artificial price reduction which is what is happening through China now. We will make sure that safeguard clauses are invoked,” she told reporters answering queries on devaluation of the Chinese currency and its implications for India.
Nirmala Sitharaman also admitted that of late “exports are dwindling, lot of goods are coming into India from China, we have sectorally been analysing, very many sectors are being monitored.”
“I am not saying dumping is happening already in very many sectors… where we think that there is reasonable basis for us to feel that dumping is happening, because industry is working with us closely… where it is very clear we are ready to take action,” she said clarifying.
“I am conscious and the Ministry is working to get the situation changed in the sense to improve our exports, I am conscious that exports have fallen,” she said.
Stressing that everything was being done to tackle the situation and protect Indian manufacturing sector and products, she said: “I can assure Indian manufacturers that we shall take every step to protect Indian manufacturing sector, every step to stop dumping of goods into India, we shall safeguard our manufacturing interest.”