The Indian rupee has weakened against the US dollar, but has strengthened against other major currencies such as the British pound, the Japanese yen and the Euro during 2022, union minister of state for finance Pankaj Chaudhary stated in a written reply in Rajya Sabha on Tuesday.
According to the minister, global factors such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions are the major reasons for the weakening of the Indian rupee against the US dollar.
He further stated that exchange rate is only one of the several different factors such as, demand for domestic and foreign goods, commodity prices, crude oil prices etc, which affect India’s export and import demand.
India’s merchandise exports touched a record $421.9 billion during 2021-22. India’s monthly exports in the current fiscal have also been higher compared to the corresponding months of the previous fiscal, he pointed out.
The overall impact of exchange rate depreciation on domestic prices depends on the extent of pass-through of international commodity prices to the domestic market, the minister stated.
The minister said the Department of Commerce regularly monitors and sensitises various ministries, departments and other stakeholders from time to time and in various forums on the broad strategy to address the issue. This includes:
Addressing domestic supply rigidities and looking at domestic production opportunities/enhancement of capacity;
- Timely use of trade remedial options;
- Adoption of mandatory technical standards;
- Enforcing rules of origin;
- Tariff measures/inverted duty correction etc.
Besides, the minister said, the Department of Commerce has been carrying out import data monitoring on monthly and annual basis to identify any visible changes and to monitor surges in imports.
Further, the minister said, there is an import monitoring system for providing advance information on imports to government and stakeholders for steel, non-ferrous metals, coal and chips (integrated circuits).
It has also appraised all concerned ministries/departments on item wise surge in imports on a monthly basis such that appropriate action may be initiated where necessary. A position paper of structure of imports has also been circulated to all concerned ministries/departments annually since 2014, the minister added.