New Delhi, Sept 25 (UNI) The apex body for chemical and allied products, Capexil today said the rising vale of rupee against the greenback has resulted in a loss of margins for exporters and lower sectoral growth target.
Capexil, formerly known as Chemicals and Allied Products Exports Promotion Council, said it has lowered its yearly growth targets to about five per cent, given the hit the export sector has taken with the rupee appreciating.
Capexil is a global trade facilitator set up by the Ministry of Commerce to facilitate export of chemical based and allied products.
''Against an annual target of about 10 per cent, we have set a conservative target of about five per cent. The SMEs have been worst hit with the fluctuations in the forex rates,'' said Capexil Chairman S K Ghosh.
The exports have been further hit by the fact that almost 85 per cent of the transactions are done in dollars while a small percentage is in euros, he added.
Capexil aims to achieve a target of 20 billion dollars by 2020 from the current 9.62 billion dollars in 2006-07.
According to the data provided by the body, China is the largest exporter of products from India, comprising of about 40 per cent of the exports. The major items exported to China include iron ore, glass and glassware and rubber manufactured products.
Capexil is also looking at new markets. ''Though we have done well in volume terms, we are losing out on value terms,'' Mr Ghosh said.
The body is also discussing a 'cluster model' for the various sectors such as the ceramics or glassware sector. ''Chinese villages, in form of a cluster, excel in the production of a particular item, which are then sent off to another cluster for finishing touches.
These regions receive government support along with cooperation from the private players,'' said Mr Ghosh said.
The same model can be applied in India as well, and Capexil has already identified Khurja, near Delhi and Morvi in Gujarat for the project. ''This wopuld reduce the cost of production as well as provide employment to more people. The rate of recovery and sales will also improve,'' he added.
Technological upgradation will also play an important role in furthering growth in the exports sector.