Strong rupee to hit exports, says survey

New Delhi, Apr 8 (UNI) With the rupee hardening against the American dollar, the exporting community in North India is worried this will adversely affect their future export prospects in the US market by making their goods more expensive.

Exporters are particularly perturbed by the fall in profits arising out of the recent surge of the rupee, a survey carried out by the PHD Chamber of Commerce and Industry (PHDCCI) for units located in Punjab, Haryana, Chandigarh, Delhi, Uttar Pradesh, Rajasthan, Himachal Pradesh and Jammu and Kashmir said today.

The rupee soared to an eight-year high against the dollar breaching Rs 43 per dollar and touched Rs 42.84 per dollar on Wednesday.

The survey shows that the international buyer is not willing to pay to the exporter the extra price accruing from currency appreciation. The appreciation percentage has hence to be borne by the exporter which lowers his export proceeds and serves to erode his profit margin.

According to PHDCCI, the strengthening of the rupee is particularly detrimental for the low-import intensive and price sensitive terms such as textiles especially when competitors such as Pakistan have not witnessed a similar currency appreciation.

Exporters also complain of incurring a loss between the period of invoicing and realisation of proceeds on account of rupee appreciation.

''A fresh appreciation is bound to hurt export prospects of domestic industries in the future. Around 77 per cent of the respondents are worried that their future exports would be affected. Only 23 per cent maintained that their exports would remain unaffected by this phenomena,'' the PHDCCI survey said.

Around 60 per cent of the respondents said that the net impact of the sharp rise in rupee would be negative on their company while around 30 per cent were neutral about the impact.

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