India's SME segment hit hard by rising rupee: report

Monday, 23 July 2007, 07:00 Hrs   |    1 Comments
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New Delhi: The unabated rise of the Indian rupee continues to adversely affect Indian exporters, especially small and medium enterprises (SMEs), says a leading industry body.

The exporters were recently given a relief package of 14 billion by the government to offset their losses, but they termed it inadequate and urged a long-term strategy, said a survey conducted by the Associated Chambers of Commerce and Industry of India (Assocham).

According to the chamber, a massive 80 percent of the exporters complained that the 10 percent rise in rupee valuation has rendered the export proceeds uncompetitive.

The level of appreciation of the Indian rupee, which strengthened by 8.35 percent during the first half of this year, is second only to that of the Brazilian currency, which appreciated by 9.28 percent during the same period.

"Rising transactions cost and lack of availability of proper infrastructure, coupled with little government support to exporters, have in recent past threatened their better prospects for higher export proceeds," said Assocham president Venugopal N. Dhoot.

The survey, covering 400 exporters and export promotion councils as well as commodity boards, showed that textiles, leather, gems and jewellery are already witnessing a slowdown on account of rupee appreciation.

India's major export destinations are the US, the UAE, Europe, Hong Kong and Singapore.

Exporters are also jittery of the fact that the rupee would appreciate more and its effect vis-à­¶is other Asian currencies would erode away its competitive edge, Assocham said.
Source: IANS
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