The Hindu Business Line : Exporters urged to explore markets in Europe

The Indian exporting community is passing through a phase of “high uncertainty” and is in “deep distress”. In addition to lower realisation as a result of strong rupee, now even order renewals have started taking a hit, says the Federation of Indian Chambers of Commerce and Industry (FICCI).

In a seminar on ‘US dollar fluctuation and Indian exports - The road ahead’, here, experts grappled with issues such as enhancing productivity and moving up the value chain, looking at new markets, shifting focus towards the domestic market, hedging the exchange rate risk and shifting away from the US dollar to other currencies.

Mr Rafeeque Ahmed, Chairman, FICCI - Tamil Nadu State Council, said exporters must not look at the US as the only export market for them. Instead, they must explore markets in Europe. They also have to be more competitive to win back orders.

According to Mr M Saikumar, Zonal Joint Director General of Foreign Trade, Chennai, artificial measures to check the rising rupee are not practical in the macro economic point of view. He also expressed confidence that the country’s economy is on forward track.

Demand for Indian goods

“Demand for Indian goods in the global market has certainly not reduced,” he said. In the long-term, the rupee appreciation will only help exporters and will bring in rich dividends as technological upgradition will happen with cheaper imports now, he said.

Speaking on the sector-wise impact of rupee appreciation on Indian exports, Mr K. Muthukumaran, Chief General Manager, EXIM Bank, said though sectors such as IT, cotton textiles, jute, apparels, leather and agro-based products might have adverse impact on their profit margins, sectors such as woolen textiles, inorganic chemicals, paints and dyes, plastics, non-electrical machinery, machine tools and base metals are likely to have positive impact of rupee appreciation.

Within in the textile sector, with an export intensity of 71 per cent, silk would be the most vulnerable sector followed by apparels with 52 per cent export intensity and cotton textiles (23 per cent), Mr Muthukumaran said.

It is high time that the companies planned their strategies, factoring in possible movements in exchange rates and toned up their risk management policies to withstand the market risks.

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