Rupee rise hurting exports: Kamal Nath
Govt says it was planning a package to soften its impact on employment-intensive sectors, which do not rely heavily on imports.business Updated: Jun 04, 2007 19:48 IST
The government on Monday said appreciation of the rupee against the dollar is hurting exports and it was planning a package to soften its impact on employment-intensive sectors, which do not rely heavily on imports.
"The appreciation of the rupee is (adversely) impacting exports. It is a cause of concern. We have invited comments from export promotion councils on how to cushion employment intensive industries, where dependence on imported inputs was less, from it," Commerce and Industry Minister Kamal Nath said.
The minister had earlier said that the proposed package could be in the form of a scheme to refund local taxes that exporters have to pay.
He said due to rising rupee, realisations of exporters have gone down, thus hurting their competitiveness.
As value of dollar against the rupee has gone down, the exporters would get less money against their foreign exchange earnings, which in turn could force them to raise prices of their products making them less competitive.
Nath said the full impact of the appreciating rupee would be felt in July when new contracts were entered into.
The rupee has appreciated more than 12 per cent since August.
He asked the exporters to deal with the rising rupee and high costs of inputs by becoming more efficient as it would also help them in facing competition.