The surprise move by China to devalue its currency is a threat to the pace of India’s exports, according to analysts.
Indian exports have already been under pressure and the devaluation of the Chinese yuan is “leading to a further widening of trade competitiveness for Indian exporters”, said Devendra Kumar Pant, the chief economist at India Ratings and Research, which is part of Fitch Group.
“India’s key items of exports are petroleum products, gems and jewellery, chemicals and textiles,” he said. “Key markets for Indian exporters are EU, US, UAE, Hong Kong and China. Top Chinese exports include clothing, gems and jewellery, base metals and machinery which are some of the key items that India also exports. The high overlap in markets and also products highlights the threat Indian exporters face from China.”
Exports of emerging markets, including India and China, have been hit by a slowdown in the global economy. China is the world’s biggest exporter.
“A weaker yuan may encourage other central banks in the region to devalue their currencies to stay competitive,” said Mr Pant.
Indian stocks declined and the rupee tumbled to a two-year low in reaction to the move by China.
“The markets’ response to Chinese surprise devaluation of its currency against the US dollar is ample evidence that investors worry about further measures across Asian countries in order to prop up export competitiveness,” said Anand James, the co-head of the technical research desk at Geojit BNP Paribas. “A race among exporting countries to improve exports’ attractiveness may lead to competitive devaluation, especially in Asian currencies, and may also lead to sluggish internal demand.”
Shilan Shah, the India economist at Capital Economics, said the fall in the rupee was not “a cause for concern”, adding that “the moves in the renminbi are a sign of financial reform rather than a declaration of a currency war”.
“The rupee also remains relatively strong on broader measures,” Mr Shah said. “Since the middle of last year, the currency has appreciated by 10 per cent on a real trade-weighted basis, dampening the prospects for exports. A slight fall in the rupee may therefore be welcomed by policymakers.”
China is a top five export market for India but its exports to China fell by 19.5 per cent to $11.9 billion in the past financial year compared to the previous year, according to India Ratings and Research.
“Items whose exports were over $1bn included cotton, copper and its articles, mineral fuels and oils and organic chemicals,” Mr Pant said. “Chinese demand for Indian goods is likely to contract further due to the decline in the overall demand in the world’s second largest economy.”
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Zayed Sustainability Prize
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
Museum of the Future in numbers
- 78 metres is the height of the museum
- 30,000 square metres is its total area
- 17,000 square metres is the length of the stainless steel facade
- 14 kilometres is the length of LED lights used on the facade
- 1,024 individual pieces make up the exterior
- 7 floors in all, with one for administrative offices
- 2,400 diagonally intersecting steel members frame the torus shape
- 100 species of trees and plants dot the gardens
- Dh145 is the price of a ticket
Where to Find Me by Alba Arikha
Alma Books
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Rock in a Hard Place: Music and Mayhem in the Middle East
Orlando Crowcroft
Zed Books
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
