“I can’t collect money, and I can’t ship containers out. I’m really worried!” Mr. Zhang, the head of a textile company in Keqiao, has been restless for the past two days. On the 8th, Indian Prime Minister Modi suddenly announced that he would stop using 500 and 1,000 rupees. Two large denomination banknotes. Affected by this new policy, many normal bilateral trade orders have been disrupted.
In order to combat corruption and black money from unknown sources and encourage everyone to file taxes, Indian Prime Minister Narendra Modi suddenly announced on the evening of the 8th that two large denomination banknotes of 500 and 1,000 rupees will be “immediately invalid” after midnight, and all ATM withdrawals will be invalid. The machine will be out of service on the 9th and 10th. New 500 rupee and 2,000 rupee notes will be issued at the same time.
Indians have the habit of hiding cash. Mr. Zhang told reporters that he once visited the Indian fabric market and found that local people basically settled business in cash, and there would be large amounts of cash hidden in the yards of their homes and in the trunks of their cars. Modi’s policy is equivalent to making many people’s money “transparent” all of a sudden.
70% of Mr. Zhang’s company’s export business is in the Indian market and has more than 10 Indian customers. “In the past, one container of fabric was exported to India basically every other day. Now Indian customers basically have no time to do business, and the Indian market is also closed. Yesterday, a container was supposed to be shipped out, but it was urgently stopped. The warehouse There are still 4 containers waiting for shipment, so they can only be put on hold.”
What’s more important is that Mr. Zhang still has 2 million US dollars in payment in the Indian market that has not been collected. “A few days ago was the most important festival in India – Divali. Everyone was busy celebrating the festival. Originally, payment for goods would be received one after another after the festival, but now Indian customers have said that they cannot remit money on time.”
Like Mr. Zhang, Mr. Yang, the boss of another textile trading company in Keqiao, is also very worried. Mr. Yang specifically checked the news and learned that Indians can take the old large-denomination currency to a bank or post office to exchange it before December 30, but they must register, explain the source of the currency, and fill in many documents. The process is very complicated. “Towards the end of the year, many of my suppliers are waiting for settlement. If Indian merchants are unable to pay, my capital flow will also be affected.” Mr. Yang said distressedly.
The reporter learned from Shaoxing Customs that from January to September this year, Shaoxing’s total import and export to countries along the “Belt and Road” was 54.11 billion yuan, with India accounting for more than 11% and showing a steady growth year by year. Industry insiders are worried that “Modi’s New Deal” will have a negative impact on bilateral trade.
The reporter consulted a relevant person from the Municipal Commerce Bureau about this. The person said that the “Modi New Deal” affects not only the textile industry, but all import and export businesses related to India. However, this difficulty should be temporary. I believe the impact will pass soon, and relevant textile companies do not need to be overly anxious. India’s monetary policy affects Shaoxing textile enterprises
