THE Centre’s Rs 1,400-crore revival package for exporters is not cutting much ice in the northern export belt. A spot analysis from Ludhiana and Jalandhar shows that the nine main sectors have been severely hit due to the appreciating rupee, and they are: textiles (including handlooms), readymade garments, leather products, handicrafts, engineering products, processed agricultural products, marine products, sports goods and toys.
Though the Confederation of Indian Industry (CII) has welcomed the announcement of the government, especially the reduction in interest rates on pre and post-shipment to help exporters, the industry feels the package does not fulfil the demands of some quarters.
S P Oswal, chairman, Vardhman group of companies, says, “In case of garments, the relief package is all right, but for yarns, it’s not adequate. Since it requires lots of value additions, duty drawback is also short of our expectations.”
J R Singal of Eastman group, Ludhiana, says, “It was too late for the government to announce the relief package. Reducing export rate by 2% is not a big things. We are already losing 10% of our turnover due to the rising rupee.” However, the views of Tarun Chawla, vice-president, Malwa Industries, slightly differ from those of others. He says, “This has definitely provided a breathing space for the industry.”
In the wake of strengthening rupee and consequent pressure on profit margins, Indian exporters are exploring euro-denominated trade opportunities. This is revealed by a Ficci survey on exports. The survey shows that a combination of factors, namely rising cost of raw materials, hike in interest rates and appreciating rupee, has jolted the confidence level of Indian exporters.
While the Indian exporting community has welcomed the measures outlined in the Trade Policy Announcement for 2007-08, its enthusiasm with regard to export performance in the near term has been severely dampened by the sudden and sharp appreciation of the rupee in the last few months. The results of Ficci’s latest export survey show that the incremental improvement in the outlook for exports seen in the last survey has failed to sustain itself.