Yen Depreciation Not A Concern For Indian Exports To Japan: FIEO

ENA Sectors 2024-03-29 14:49:10 New Delhi, Mar 29 (KNN) The recent depreciation of the Japanese yen is not anticipated to adversely affect India's exports to Japan, clarifies the Federation of Indian Export Organisations (FIEO). While the weaker yen may elevate the costs of Indian imports of electronics, machinery, and auto components, it is unlikely to impact India's exports to Japan significantly, as stated by FIEO's Director General and CEO, Ajay Sahai. Sahai explains that India primarily exports goods like apparel and marine products to Japan, which are not produced domestically by Japanese companies, thus avoiding direct competition with domestic manufacturers. Consequently, despite the yen's depreciation, these products may become relatively more expensive for Japanese consumers but are unlikely to face a decline in demand, Sahai added. However, Sahai notes that Indian companies, especially larger ones with borrowings in yen, may face challenges due to the weakening yen. Nonetheless, he suggests that hedging options could help mitigate such impacts. The yen's recent decline to its lowest level in 34 years, hovering around 152 to the dollar, has been attributed to the Bank of Japan's decision to end its negative interest rate policy. Sahai acknowledges that the depreciation of the yen could enhance the competitiveness of Japanese exports by making them cheaper. Furthermore, the depreciating yen might prompt Indian companies to increase their imports of electronics, machinery, and auto components from Japan, potentially leading to a shift away from other sources. Arun Kumar Garodia, Chairman of the Engineering Export Promotion Council (EEPC), echoed Sahai's sentiments, stating that the engineering sector exports to Japan are unlikely to be significantly impacted by the yen's depreciation. He emphasised that most of India's exports are invoiced in dollars and euros, thus insulating them from the recent developments in Japan. However, Garodia acknowledges that Indian companies with yen-denominated borrowings may face challenges. (KNN Bureau) 37210 https://knnindia.co.in/news/newsdetails/sectors/yen-depreciation-not-a-concern-for-indian-exports-to-japan-fieo 2024-03-29 14:49:10 knnindia.co.in Yen Depreciation Not A Concern For Indian Exports To Japan: FIEO