Rupee appreciation may hold back growth of fibre textile industry

Mumbai, May 8 (UNI) The surging rupee may hold back the growth of Indian Fibre Textile industry, which had set a target of USD 2921 million for the current fiscal but is finding it a distant target in wake of rupee appreciation.

According to industry sources, the hardening rupee has taken the competitiveness of man-made fibre textiles away from International markets creating panic among Indian exporters.

The situation may get further worse if proper steps are not taken by the Indian government.

''The exporters can not pass on the burden to buyers in United States. Though fibre textiles witnessed a 24 per cent growth in exports during the year 2006-07, things won't be easy with us unless rupee appreciation were put under check'', said Sanjeev Saran, Chairman of Synthetic and Rayon textiles export promotion council(SRTEPC), in a statement.

Since the Indian exports consists mainly thin margined medium to lower end commodity items where small and medium exporters are major players, the community is not equipped to handle adverse situations, said Saran.

The fact that currency rates remained unchanged in the last three months in China and Indonesia and had posted a mere 1-3 per cent growth in Korea and Thailand has put the Indian exporters under immense pressure.

The recent hike in interest rates on pre-shipment and post shipment credit by three per cent coupled with the increased operating costs have added fuel to the fire, he said.

The council also wanted the union government to take special care in matters like high transaction costs, service tax and fringe benefit tax, Saran added.

UNI