Interviews
Nath announces package to offset impact of rising rupee on export
14 Jun '07
3 min read
While agreeing with exporters that rupee appreciation was currently a major problem, Shri Kamal Nath exhorted the exporting community to look at it also as an opportunity to enhance their competitiveness and to look at new markets.
“Rupee rise is no doubt a problem, but it is also an opportunity for all of you to move towards greater efficiency, reducing costs and enhancing competitiveness."
"Whether rupee rises or not, new competition in global markets is a fact of life which has to be addressed. You must also look at new markets. I am confident that the resilience of our exporters will enable us to tide over the problems caused by rupee appreciation and achieve the export target of US $ 160 billion set for the year 2007-08”, he said.
In his presentation to the Minister, President/FIEO said that the exporting community had been badly hit due to the sharp appreciation of the Indian rupee over a short period of time.
“We have reached a stage where we have stopped entering into new contracts. This will be reflected in sharp dip in exports from July onwards. Many of small exporters of traditional items in price sensitive segments have already closed their factories”, he said.
Due to the impact of the appreciating rupee, secondary data on different sectors reveals that export realizations have fallen by 12% for chemicals, 6.0 to 6.5% for textiles and exports are likely to dip by 20 – 25% for processed.
Hardening ofinterest rates have further impinged export growth in a inherently high transaction cost economy like India, he added.
“The loss of exports will have serious implications for employment opportunities and we are likely to lose 40 lakh jobs this year." The wages will also be squeezed with drop in export value on account of Rupee appreciation and increase in inputs cost due to inflation and firming up of international metal prices”, FIEO President said.
“Rupee rise is no doubt a problem, but it is also an opportunity for all of you to move towards greater efficiency, reducing costs and enhancing competitiveness."
"Whether rupee rises or not, new competition in global markets is a fact of life which has to be addressed. You must also look at new markets. I am confident that the resilience of our exporters will enable us to tide over the problems caused by rupee appreciation and achieve the export target of US $ 160 billion set for the year 2007-08”, he said.
In his presentation to the Minister, President/FIEO said that the exporting community had been badly hit due to the sharp appreciation of the Indian rupee over a short period of time.
“We have reached a stage where we have stopped entering into new contracts. This will be reflected in sharp dip in exports from July onwards. Many of small exporters of traditional items in price sensitive segments have already closed their factories”, he said.
Due to the impact of the appreciating rupee, secondary data on different sectors reveals that export realizations have fallen by 12% for chemicals, 6.0 to 6.5% for textiles and exports are likely to dip by 20 – 25% for processed.
Hardening ofinterest rates have further impinged export growth in a inherently high transaction cost economy like India, he added.
“The loss of exports will have serious implications for employment opportunities and we are likely to lose 40 lakh jobs this year." The wages will also be squeezed with drop in export value on account of Rupee appreciation and increase in inputs cost due to inflation and firming up of international metal prices”, FIEO President said.
Press Information Bureau Government of India
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