The rupee’s whipsaw against the US dollar has kept traders on the edge for the past two years, but the local currency’s movement relative to that of its giant northern neighbour is giving the policy mandarins in New Delhi some cause to cheer. In the past one year, the rupee has lost about 13 per cent against the Chinese Yuan, signalling better days for Indian exporters. “While competitiveness in exports depends on many factors, the exchange rate is one of them,” said Saugata Bhattacharya, chief economist at Axis Bank . “This is particularly true for exports to a country like China, which has so many other advantages. This is an opportunity to explore the export markets in China.” 

In February, exports to China rose 12.03 per cent to Rs 7,650 crore, while imports increased 26.35 per cent to Rs 40,162 crore, show the latest government data. “The currency impact if sustained over a longer term period would provide an advantage to Indian exporters to China,” said Madan Sabnavis, chief economist, Care Ratings. Currency value is one of the factors driving exports, though the overall growth in the importing country is also important. 

“This said, as the rupee has depreciated against the yuan, typically exports should become more competitive,” said Sabnavis.