The Hindu Business Line : Rising rupee: Kamal Nath seeks PM's intervention

New Delhi May 8 With the rupee rising to a new high vis-à-vis the US dollar, the Commerce and Industry Minister, Mr Kamal Nath, has sought the intervention of Prime Minister, Dr Manmohan Singh, in the issue, particularly to address the concerns of the exporting community.

"The Commerce Minister has written to the Prime Minister on this issue. People at the highest level are aware and something is being done. Some action will be taken. It is of concern to us too," Mr G.K. Pillai, Commerce Secretary, told the Federation of Indian Export Organisations (FIEO) members at an open house meet on foreign trade policy.

Official sources said that the Prime Minister had been requested to convene a meeting of all agencies concerned to discuss the matter and take appropriate action.

The rupee has been scaling new heights against the dollar and has touched a nine-year high of Rs 40.55.

The FIEO President, Mr G.K. Gupta, on Tuesday urged the Government to intervene in the larger interest of exporters so that they are able to maintain their competitive edge in the global market and also achieve the target set by the Government.

The Government has set an export target of $160 billion for 2007-08 and $200 billion for 2008-09.

Mr Gupta said that the continuous appreciation of the rupee was exerting pressure on profit margins of exporters.

"The sharp fluctuation in the exchange rate is not good for any serious importer or exporter. Exports costing, particularly for those getting spot orders, becomes complicated and uncertainty looms until they realise money for shipments effected."

He added that small exporters, particularly those in traditional sectors who are ignorant of risk cover mechanisms, were "feeling the pinch."

Mr Gupta also said that increase in raw material cost and interest rates had compounded the exporters' woes. An exporter said that export credit rates had gone up by three per cent in recent weeks.

Meanwhile, Mr Pillai indicated that all notifications relating to the announcements made in the annual supplement to the foreign trade policy would be issued by the Revenue Department by May 19.

He also said that the benefits of the Focus Product and Focus Market schemes would be extended to exports made from non-EDI ports as well. This has been a long-pending demand of exporters.

The Commerce Secretary also said that all ports in the country would be electronically connected in 8-9 months.

The Government is keen on reducing transaction cost and simplifying procedures for exporters, and looks at this as a better way to boost exports in the long run rather than relying on various incentives.

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Rising rupee: Kamal Nath seeks PM's intervention