As a weakening rupee drives up the cost of imports from China, some Indian businesses, as reported earlier by The Economic Times, are exploring yuan-denominated settlements to mitigate foreign exchange pressures.
However, exporters, risk experts, and economists tell ET Digital that adoption of the practice remains limited among micro, small and medium enterprises (MSMEs). Most businesses see localisation and supply-chain diversification as more sustainable strategies for managing currency volatility than moving away from the US dollar. Notably, the development comes as Indian manufacturers grapple with rising costs of imported raw materials and components amid currency volatility.
