Fast appreciation of rupee has hit hard to the Indian exporters. Most of the exporters make their invoice in dollar term as such they are losing more than 8 per cent.
Exports grew at a very healthy rate for the last three years however, it seems exports are decelerating. According to the all
An internal study conducted by the Commerce Ministry reveals that the textile industry, one of the largest employment generators in the country, appears to be severely hit by the hardening of rupee.
What is true with textile industry is also true for carpet industry because most of our exports are price sensitive and mostly invoiced in US dollar. In that situation it would be hard to meet the target set by carpet exporters.
Government is deliberating to find mechanism to offset the losses to exporters. Support packages are on its way and are expected to be cleared within a month. The packages that are on the anvil are: refund of certain taxes; reducing premium on insurance cover on exports; reducing ECGC premium rate by 10%; enhance duty drawback by 5% and rates of duty neutralization schemes like Duty Entitlement Pass Book; reducing interest rate on pre and post shipments to 6%; paying interest on Exchange Earner’s Foreign account; Service Tax exemption etc.
In the last two month the rupee has risen by 13% which is having an impact on orders besides it is also causing employment loss. It is expected that export will dip drastically if these measures are not taken immediately.
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