The appreciating rupee has been a matter of worry for practically every industry involved in exports, with the textile industry perhaps the worst hit. A Sakthivel, president of Tirupur Exporters Association (TEA), expects a sharp decline in exports this fiscal. Speaking to Indiaretailing, he said, “Last year our exports were around Rs 11,200 crore, and this year we do not expect more than Rs 9,500 crore of export from Tirupur. This will result in a reduction of up to 12-15 per cent of exports this year.
It is the first time that the rupee is appreciating and the players in the industry were not mentally prepared to face this, according to Sakthivel. To prepare Tirupur-based exporters face the situation, TEA had organised a series of workshops from this March. Sakthivel said, “The booking orders have reduced drastically since the rupee appreciation. Buyers are now exploring markets like Bangladesh and Sri Lanka. Buyers from Europe too are demanding to trade in dollars now, which is another cause for worry.”
The recent announcement by the finance minister to grant a two per cent interest relief has been welcomed by the association, though Sakthivel feels that further respite for exporters can be mainly brought in by exemption of service tax and FBT. Also, in his view, a fixed exchange rate can be fixed for exporters who are trading in dollars.
The rupee appreciation is a major worry also for the labourers involved. Sakthivel informed, “Since March 2007, we have had to lay off 14,000 workers from the 4.5 lakh workforce, and if this trend continues, by March 2008 there will be a further resting of another 45 thousand workers.”
– Zainab Morbiwala, Mumbau Bureau