Interviews
Appreciation of rupee slows down textile & garment exports
10 Apr '07
2 min read
Shri Prem Malik, Chairman, Texprocil in a statement expressed deep concern at the slowing down of the exports of textiles and clothing to major markets like USA. In the case of USA, imports from India for the year ending January 2007 had grown by only 5% against a growth of 27% for China, 26% for Indonesia, 20% for Bangladesh and 23% for Cambodia.
Attributing this slow down to the sharp appreciation of the Indian Rupee vis-a-vis the US Dollar, Shri Malik called for urgent steps to be taken to rein in the unusually sharp appreciation of the rupee witnessed during the last 9 months.
The Rupee, he pointed, has appreciated from trading at a level of Rs.46.51 to the US Dollar in August 2006 to the present level of Rs.42.65 to the US Dollar as on 9th April 2007, recording an increase of 9% over this period.
This increase has had direct bearing on export realization leading to a slowdown in exports. Alongwith a severe pressure on prices, high interest costs, growing cost of inputs on account of rising inflation, high transaction costs on account of poor infrastructure, appreciating rupee was making exports from India highly uncompetitive in world markets.
On the other hand, the consistently undervalued Yuan has resulted in the overwhelming presence of Chinese textile and clothing products in the major markets. For instance, despite restrictions imposed by USA on imports of clothing from China, imports from that country, grew by 27.4 % during the year ending January 2007, while imports from India grew by only 1.7%.
In view of this situation, Mr. Malik appealed to the Government to intervene effectively in the matter so that exporters of textiles, already burdened by high costs, do not lose their share in world markets on account of low realization in rupee terms.
Attributing this slow down to the sharp appreciation of the Indian Rupee vis-a-vis the US Dollar, Shri Malik called for urgent steps to be taken to rein in the unusually sharp appreciation of the rupee witnessed during the last 9 months.
The Rupee, he pointed, has appreciated from trading at a level of Rs.46.51 to the US Dollar in August 2006 to the present level of Rs.42.65 to the US Dollar as on 9th April 2007, recording an increase of 9% over this period.
This increase has had direct bearing on export realization leading to a slowdown in exports. Alongwith a severe pressure on prices, high interest costs, growing cost of inputs on account of rising inflation, high transaction costs on account of poor infrastructure, appreciating rupee was making exports from India highly uncompetitive in world markets.
On the other hand, the consistently undervalued Yuan has resulted in the overwhelming presence of Chinese textile and clothing products in the major markets. For instance, despite restrictions imposed by USA on imports of clothing from China, imports from that country, grew by 27.4 % during the year ending January 2007, while imports from India grew by only 1.7%.
In view of this situation, Mr. Malik appealed to the Government to intervene effectively in the matter so that exporters of textiles, already burdened by high costs, do not lose their share in world markets on account of low realization in rupee terms.
The Cotton Textiles Export Promotion Council
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