23 September, 2020

Free From The Asian Flu

There is little to worry about except for yuan's devaluation

Free From The Asian Flu
WILL financial crosswinds in Asia chill the much-expected recovery in India? If it does, it would be a tragedy. For, when the Asian countries had a miracle, India was closed to the world and happy with its Hindu rate of growth. Now when the miracle-makers are going under, India is outward bound and getting the north wind at full blast.

Experts, however, feel that the worst impact of the Asian crisis on India's economy may be over. And the threat of intense competition, including undercutting and large-scale dumping, to India's exports may not be as severe as feared by industry. India's exports to East Asia, including Japan, is 20 per cent of its total exports, the bulk of which again is in the low-value segment.And the significant threat will arise only if China tries seriously to increase its share of the global market.

If China does go ahead and devalue its yuan, exports of textiles and garments could take a severe hit, feels economist Bibek Debroy. Next in the line of firing would be gems and jewellery (mainly diamonds) and to some extent, engineering goods. The other...



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