US-China tensions to have a ripple effect on Indian economy
According to an analysis by Indian Ratings and Research (Ind-Ra), the trade spat between US & China will lead to the latter dumping its products at predatory rates in emerging markets, including India. Some of the sectors that will be severely impacted in India include steel, polymer & capital goods.
Not only is this to disturb the demand-supply dynamics in the Indian domestic markets, it could also possibly cause a devaluation of the Chinese Yuan (RMB). This, in turn, may stimulate a depreciation of the Indian rupee, creating difficulties for Indian exporters. At the same time, this could create inflationary pressures in the US and lead to weaker foreign portfolio investments by it in emerging economies.