Bharti group chairman Sunil Bharti Mittal on Sunday demanded a cut in interest rates to help exporters who are suffering losses due to appreciation of Indian rupee. Mr Mittal, who is also president of CII said that the appreciation of the Indian rupee has led to a loss of comparative advantage for Indian exporters and has also put pressure on margins through cheaper imports. The rupee has appreciated by 11.8 per cent in the last one year.
"Countries that are competitors to Indian exports in textiles, apparels and leather have a comparative advantage on the local currency front vis-à-vis the US dollar as their respective currencies have appreciated at a lower rate than the Indian rupee. The Chinese yuan has appreciated by 3.6 per cent, the Pakistani rupee has appreciated by 0.3 per cent, Bangladeshi Taka by 3.2 per cent and the Sri Lankan rupee has depreciated by 4.6 per cent thus making Indian exports in this vital sector dearer since January 2007," said Mr Mittal.
"Reducing the interest rates will not only help Indian industry including exporters to reduce their costs, but will also reduce the interest rate arbitrage opportunities and help in moderating inflows of US dollars. The RBI and the government should take measures to arrest further appreciation of the rupee and certain damage control measures could be taken to reduce the impact of the dual problem of rupee appreciation and high interest rates on the bottom lines of Indian industry," Mr Mittal said.
Mr Mittal expressed concern over declining rates of exports. Export during the month of August 2007 registered a growth of 18.91 per cent compared to August 2006 at 41.14 per cent and exports growth during the period April-June 2007 at 18.11 per cent compared to 32.4 per cent growth during the same period last year.
No comments:
Post a Comment