Date:09/07/2007 URL: http://www.thehindubusinessline.com/2007/07/09/stories/2007070950971400.htm

Back Rising rupee may impact export earnings target: Assocham

IT, services exports among those to feel the pinch

Our Bureau

New Delhi, July 8 India witnessed the second highest appreciation in its currency at 8.35 per cent between January and June of the current year, after 9.28 per cent of Brazil, among emerging economies that are in direct competition with Indian exporters, revealed a study conducted by industry body Assocham.

The fallout of rupee appreciation is expected to decelerate India’s exports proceeds to $145 billion against the targeted figure of $160 billion for 2007-08, according to the chamber.

The study took note of currencies of China, Taiwan, Brazil, Indonesia, Malaysia, Hong Kong, Pakistan, Russia, Thailand, Bangladesh, Indonesia, South Korea and Singapore.

According to the study, the major export sectors that come directly under appreciation threat are IT & services, textiles, leather, sugar and pharmaceuticals.

The IT industry will loose its competitive ground. The appreciation of rupee is affecting the realisations and competitiveness of the IT software and services export segment.

The exporting small and medium enterprises which operate on thin margins are badly affected, according to the study.

The textiles and leather industry is also affected. Indian textile exports face competition from China, Bangladesh and Pakistan in the region and their currencies have appreciated insignificantly.

Besides, the US is the biggest market for the textile sector whose economy itself is facing a slowdown.