Mumbai: Against the backdrop of 11.4% decline in India’s October exports, engineering exporters have pitched for a stable currency regime on lines of China to avoid loss due to frequent fluctuations in the foreign exchange. Besides, engineering exporters under the ageis of EEPC (erstwhile engineering exports promotion council) of India will urge Reserve Bank of India (RBI) to let them start trade in the Indian rupee whereby exporters can quote, order and export all in the Indian rupee.
Engineering exports, which grew by 18% even during the economic meltdown touching $40 billion, have decreased 22% in the first six months of the current year. Rajat Srivastav, regional director of EEPC India told FE “We will call upon the RBI to launch a stable currency regime as frequent fluctuations in foreign exchange are making operations difficult for engineering exporters. There is a long gestation period required for engineering exports and it is impossible to trade if foreign exchange fluctuates quite often. Rupee appreciation makes exports uncompetitive and thus a need for a stable currency regime. This will also be helpful for non-engineering exports.”
Srivastav said instead of trading in dollar or pound, RBI should allow engineering exports in the Indian rupee. “To start with, this can be launched in the Saarc countries for example in Sri Lanka and Bangladesh. In such transactions, no foreign exchange is involved though banks may be asked to complete the necessary formalities.”
Source : FinancialExpress