In the case of Chemicals and Petro-chemicals too, China, South Korea and Thailand enjoy an edge over Indian exports in the international markets due to the high differential rates of appreciation, which is lower than Indian Rupee against the US Dollar.
The CII President expressed concern that IT & ITES sectors are at a significantly disadvantageous position when compared to competing countries such as Philippines (8.8% appreciation) and their earning and exports realisation has also had an impact on their bottom line.
Mr Mittal expressed concern over declining rates of exports growth particularly in the last four months. Export during the month of August 2007 registered a growth of only 18.91% compared to a growth registered in August 2006 at 41.14% and exports growth during the period April-June 2007 at 18.11% compared to 32.4% growth during the same period last year.
Exports could have grown at a higher rate given the robustness in output growth in the first quarter and high rates of growth in world output, said CII President.
Appreciating rupee is also impacting domestic sales as imports have become cheaper and combined with this trend are high interest rates that have affected domestic sales of consumer durables sector such as Automobiles and consumer electronics.
In the case of Automobiles, stocks have piled up during the first half of this year in an increase of 18.7%, said the CII President.
Reducing the interest rates will not only help Indian industry including exporters to reducing their costs, but will also reduce the interest rate arbitrage opportunities and thus will help in moderating inflows of US Dollars.
It is time that RBI and the Government take measures that will help arrest further appreciation of the Rupee and certain damage control measures could be taken to reduce the impact of the dual problem of rupee appreciation and high interest rates on the bottom lines of Indian industry.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
