Yuan devaluation: impact and implications on Indian Economic System

Devaluation on present monetary policy is a reduction/lowering in the value of currency with respect to those articles, services and monetary units with which that currency can be exchanged. China being the large economy and an economic world power will have instant impact on the economics directly related to it and the global economics as a whole. India being the major Import/Export partner with China and due to this the Yuan devaluation had made the sudden and transitional impact on Indian economy. Indian stock market crashed 1627 points in single day was the first glaring impact on Indian economy. Devaluation will be good for deficit and inflation management, gold import, Reduction in Mobile prices and Low electronic gadgets prices but may put pressure on exports, rupee volatility, automobile prices and dumping of Chinese goods in the Indian market. This article is aimed to bring forth the positive and negative impact of Yuan devaluation in China on Indian economy and also the implications of this on the economy of India.