Exporters' body FIEO today said the rupee appreciation during the last two months has negatively impacted the country's exports, and demanded immediate support from the government.
The body will soon raise concerns of the export sector with the Ministry of Commerce & Industry and the Ministry of Finance, and urge for immediate support both in the short and medium term, Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta said.
Gupta is of the view that certain incentives in the form of interest subvention being given to the manufacturers may be extended to merchant and various other sectors of exports.
Moreover, he said Merchandise Exports from India Scheme (MEIS) across sectors at the average rate of about 3 per cent can somewhat offset losses on account of the rupee appreciation and further boost exports in such challenging times.
The rupee today surged by 15 paise to close near a fresh 21-month high of 64.11.
A stronger rupee against the dollar erodes the margins of the exporters and reduces their competitiveness. However, the Indian economy stands to benefit in terms of the impact of price rise. As India is a net importer, the appreciating rupee will result in lower crude oil prices, keeping both wholesale and retail inflation under check in the near term.
If the current trend continues, the FIEO president expects the rupee will be in the range of around Rs 62 to a dollar in the next three months.
He said a stronger rupee is definitely a good sign for the economy and reflects the inherent strength of the vibrant Indian economy, however, some support to exports is the need of the hour.
Source: Money Control