Home / Knowledge / News / Textiles / 'Rupee appreciation eroding India's trade competitiveness'
'Rupee appreciation eroding India's trade competitiveness'
17
Nov '15
An Assocham study has revealed that India's export competitiveness has been eroded because of the steady real appreciation of rupee and therefore the country should not be very concerned about a strong exchange rate.

“Global experience shows that 10-15 per cent real devaluation could be a shot in the arm for an export surge, while a real devaluation of the order of around 10 per cent through a combination of falling inflation and allowing rupee to depreciate may provide much needed boost to exporters,” the study titled “What's behind India's Declining Exports,” said.

“The continuation of Rupee Export Credit Interest Rate subvention scheme for same select sectors need to be announced at the earliest,” said D S Rawat, secretary general of Assocham while releasing the chamber's study.

According to the study, the main reasons for decline in exports during the recent months of 2015-16 are, slower growth in world output and trade; appreciation of Rupee against Euro making exports to Europe, which is a major market for India and less competitive for Indian Exporters; and steep fall in oil prices resulting in consequent decline in prices as well as export realizations for petroleum products.

In addition prices of a wide range of primary commodities have also fallen, besides the overarching impact of global demand conditions exports from certain sectors reflected the impact of policy changes domestically and in destination countries as also sector-specific issues.

Presently, micro, medium and small enterprises sector get loans at 12-13 per cent. After subvention, this would come down to 9-10 per cent. However, India's competitors get it at around 5 per cent.

The study says that in two of the past three financial years, India's exports have contracted. India's merchandise exports in 2014-15 at $310 billion were much below the target of $340 billion set by the government for the third successive year and declined by 1.3 per cent.

For nine consecutive month since December, 2014 the rate of growth of both exports and imports (in dollar terms) has been in negative territory. On a cumulative basis exports during the first five months (April-August) of 2015-16 at $111 billion were lower by more than 16 per cent over the same period last year.

Under the new Foreign Trade Policy 2015-20 (FTP) announced on April 1, 2015, the government has expanded the scope of the new schemes to special economic zones (SEZs). Taking exports to the level of $900 billion by 2019-20 will need a higher compound annual rate of growth (CARG) of about 14 per cent during the FTP period (2015-16 to 2019-20) which could be a challenge.


Must ReadView All

Courtesy: Michael Kors

Fashion | On 25th Jul 2017

Michael Kors to acquire Jimmy Choo

Global fashion luxury brand Michael Kors Holdings Limited has reached ...

Apparel/Garments | On 25th Jul 2017

VF Corp posts $2.4 billion revenue for Q2 2017

VF Corporation has recorded revenue of $2.4 billion, up 2 per cent,...

Textiles | On 25th Jul 2017

Egypt signs agreement with UNIDO for cotton production

Egypt has signed a €1.5 million ($1.74 million) cooperation agreement ...

Interviews View All

Jim Desai
Blaiva Fabricaa

Fashion industry likely to remain labour-intensive in coming years

Divyesh Mashruwala
Akshar Industries

Surat dominates foiling, embossing and pleating

Rahuul Jashnani
Jashn

‘Online economy has changed the whole dynamics of buying habits.’

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

July 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Thanks for your valuable feedback. Claim your free latest sustainability e-book.


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search



X