Exporters hurt by strengthening of the Rupee
Exporters hurt by strengthening of the Rupee The Rupee is steadily appreciating. The strengthening of Rupee is adversely impacting the exports of the country. But Indian government is not willing to intervene to help the exporters. The government asked companies to increase efficiency and cut costs to let exports be competitive.The exchange rates in India are market determined. The Indian currency went up nearly 11% against the US Dollar in 2007 and about 14% in the past one year. The country`s central bank has not intervened much as this makes imports cheaper, helping it control inflation in the world`s second-fastest growing major economy. The appreciating Rupee is particularly affecting the software companies, which derive more than half of their revenue from the US. Besides, the government is aiming at merchandise exports of 160 billion Dollars in 2007-08, but the target may be scaled down if t he Rupee continues to harden. IT companies have been enjoying tax concessions for too long, which has led to a disconnect between the IT sector and rural India. Commerce and industry minister Kamal Nath said the government would see how it can give some relief to the IT sector.
