The rising rupee appears to have taken the sheen out of the textile industry, with exports falling a whopping 36 per cent below the targeted $7.5 billion in the first quarter of the current financial year.
Union Textile Minister Shankersinh Vaghela told reporters on Tuesday that exports in the first quarter of 2007-08 have hurt the industry with some units being forced to close down.
“Competitiveness of the industry has suffered in recent months on account of the steep appreciation of the rupee. Other factors like high transaction costs, power costs, technological obsolescence and local levies have also had their impact," Vaghela said.
The minister, however, appeared confident that the textile export target of $25 billion during 2007-08 would be met as bulk orders during the second half shore up trade volumes.
A package of measures to help the industry announced by the government earlier this month would also aid the exporters, he said. The government announced a Rs 1,400-crore package that included cheaper bank credit, increased rate of tax refunds and faster reimbursement claims of some levies.