Indian export to gain, import to be costlier

China's decision to revalue its currency yuan is expected to bring only marginal benefit to Indian exporters but imports of some consumer durables are likely to be costlier, industry sources said here yesterday.

With China keeping its currency artificially pegged at a rate with the US dollar for the last ten years, Chinese exports have been steadily cheaper than Indian products unless Indian exporters were willing and able to compete by reducing their margins.

However, with the appreciation of yuan against the greenback, Indian exports in key sectors such as textile, leather goods and handicrafts are expected to be slightly cheaper as China is the main rival in these areas, the sources said.

Indian exporters are not exactly celebrating because the extent of revision of the Chinese currency is not big enough to provide a major boost for exports from India, they said.

Indian textile exporters appear happy because appreciation of yuan will help gain a little more share of the lucrative markets in the US and Europe but revaluation of the Chinese currency is not the solution because what is required is that India should cut red tape and tax burden to help its companies compete on a sounder footing, according to President of All India Garments Exporters Common Cause Guild Chand Anand.

Industry sources, however, made it clear that price is not the sole factor for competition in exports and quality and timely delivery of consignments also have their value in grabbing market share.

Producers of value-added steel such as stainless steel and galvanised steel, non-ferrous metals and exporters of iron ore in India are likely to find a big opportunity in Chinese currency revaluation.