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Knitwear exporters' concern over rising rupee
Our Bureau
Coimbatore
May 1
Tirupur knitwear exporters say the strengthening rupee is a worry despite the higher growth rate clocked by them in exports.
Knitwear exports from Tirupur during 2006-07 had registered a 25 per cent growth at Rs 11,000 crore. But the rupee value had within a short time risen by 14 per cent against the dollar rendering their exports uncompetitive and causing shippers to suffer heavy losses, according to Mr A. Sakthivel, President of the Tirupur Exporters Association.
The TEA in a communication addressed to the Union Finance Minister has pointed out that China, the main competitor in global knitwear segment, has insulated its position by pegging its currency against the dollar and would, therefore, further emerge stronger. It would be impossible for India to compete and stay in the market, it said.
Calling upon the Finance Minister to prevail upon the RBI to urgently intervene in the forex market, the TEA also suggested a few more ameliorative steps in aid of the exporters, such as reducing the packing credit rate by at least three per cent as the recent RBI monetary policy to contain inflation has led to interest rate hike.
This is necessary in the light of the fact that exporters who had already booked their export orders and were in the midst of executing them too were not in a position to get any compensation from the importers for the value losses suffered on account of the erosion in dollar value against the rupee, the TEA president has said.
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