Delhi: Finance minister P Chidambaram has called upon
exporters to get used to operating in an era of a stronger
rupee instead of expecting more sops from the government
to compensate them for declining margins.
say that the rising rupee has made the $160-billion export
target for the current year difficult to achieve as overseas
sales growth has been gradually declining from 23 per
cent in April to 14 per cent in June.
July the government had announced a Rs1, 400-crore package
to compensate exporters for the decline in their margins
due to a stronger rupee, but exporters are still asking
commerce and industry minister Kamal Nath yesterday supported
exporters saying that the government was thinking of a
new package for them, the finance minister has said there
could not be a situation where the economy grows but the
rupee, remains weak. He told exporters to factor this
in their pricing while booking new orders.
have taken note of the short-term pain of exporters and
we have given them a package. No developing economy can
say I do not want capital inflows into the country. China
does not say that. We have to learn to manage these inflows.
It is difficult... It exacts a cost. But we must factor
all that and learn to manage inflows," Chidambaram
said the rupee had become strong against the US currency
because the dollar had weakened.
rupee has appreciated about 9 per cent from the lows of
Rs45 to a dollar in October-November 2006, to just above
Rs40 as it has been strengthening since March due to the
rising inflow of funds and Reserve Bank of India not buying
dollars in its efforts to curb money supply and inflation.
reserves have risen to about 225 billion dollars thanks
to huge inflows from foreign institutional investors,
who remain optimistic on Indian stock markets, and foreign
direct investments going into industry and services.