Lok Sabha Question No. 2158 (UNSTARRED), answered on 2016-05-06
Subject: Effect of Devaluation of Yuan
Ministry: FINANCE
Asked by: P. C. MOHAN

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 2158

TO BE ANSWERED ON MAY 06,   2016

## EFFECT OF DEVALUATION OF YUAN

2158. SHRI P.C. MOHAN:

Will the Minister of FINANCE be pleased to state:

- (a) whether the recent devaluation of Yuan has affected India's exports and manufacturing industry, if so, the steps taken by the Government to protect Indian manufacturing sector and boost the export sector;
- (b) whether  the  Government  objects  to  the  International  Monetary  Fund  for  including Yuan in the basket of currencies which determines Special Drawing Rights of IMF;
- (c) (c)  whether  the  Government  has  received  any  report  or  complaints  from  Indian industries including steel and tyre industries regarding dumping by China; and
- (d) (d) if so, the steps taken by the Government to protect the domestic industries?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI JAYANT SINHA)

- (a) The decline in India's exports since late 2014 as in many other countries is due to many factors like slowdown in the global economy, a sharp fall in global commodity prices, the rebalancing  and  slowdown  in  China,  the  relative  movements  in  exchange  rate  of  the currencies  of  competitors  and  the  inflation  differentials.  There  is  no  direct  impact  of devaluation of Chinese Yuan on India's merchandise exports and manufacturing industry. Infact, the Indian rupee depreciated by 6.6 per cent against the US dollar while the Chinese yuan depreciated by 2.9 per cent against the US dollar in 2015-16. The Government has initiated a number of policy measures to boost exports and promote domestic manufacturing output.  The new Foreign Trade Policy (FTP) 2015-20 announced on April 1, 2015 focuses on improving 'Ease of Doing Business' and Trade Facilitation. It complements the  other  key  initiatives  of  the  Government  like  'Make  in  India',  'Digital  India'  and  'Skills India'  through  a  framework  that  harmonises  incentive  structure  for  exports,  promotes domestic value addition and trade facilitation with enhanced ease of doing business. (b) No Sir.

(c) & (d) Yes Sir, the Government has received a number of complaints from time to time from the domestic industry including steel and tyre sectors regarding dumping by China. On the basis of petitions filed by the domestic industry, Directorate General of Anti-Dumping & Allied Duties (DGAD) has recently initiated investigations on imports of steel and tyres from China and some other countries, the details of which are given below:

|   S. No. | Investigation Type                 | Product                                                                                                                                                                                                                                                                | Countries involved                                                      | Date of Initiation   |
|----------|------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------|----------------------|
|        1 | Anti-dumping                       | Cold rolled/cold reduced flat steel products of iron or non-alloy steel, or other alloy steel, of all widths and thickness, not clad, plated or coated',                                                                                                               | China PR, Japan, Korea RP and Ukraine                                   | 19.4.2016            |
|        2 | Anti-dumping                       | Hot-rolled flat products of alloy or non-alloy steel in coils of a width upto 2100mm and thickness upto 25mm and Hot-rolled flat products of alloy or non-alloy steel not in coils commonly known as sheets and plates of a width upto 4950mm and thickness upto 150mm | China PR, Japan, Russia, Korea RP, Brazil and Indonesia                 | 11.4.2016            |
|        3 | Circumvention of anti-dumping duty | Cold rolled flat products of Stainless Steel                                                                                                                                                                                                                           | China PR, Korea, European Union, South Africa, Taiwan, Thailand and USA | 19.2.2016            |
|        4 | Countervailing duty investigation  | Hot Rolled and Cold Rolled Stainless Steel Flat Products                                                                                                                                                                                                               | China PR                                                                | 12.4.2016            |
|        5 | Anti-dumping                       | New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tires) having nominal rim dia code above 16' used in buses and lorries/trucks                                                                                        | China PR                                                                | 3.5.2016             |

Safeguard duty @20% has been imposed on HR coils for a period of two and a half years w.e.f  14.09.2015.  The  domestic  Indian  industry  has  also  been  advised  to  file  safeguard application  along  with  supporting  data,  so  as  to  enable  the  Directorate  General  of Safeguards in determining the existence of serious injury or threat of serious injury to the domestic industry caused by increased imports.

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