Coir Industry hit by rupee appreciation

Kochi, June 8 (UNI) The Coir Board has submitted a memorandum to the Reserve Bank of India (RBI) to check the appreciation of rupee, which had badly hit the coir exports.

Coir Board chairman A C Jose, in a memorandum to RBI Governor Y V Reddy, pointed out that the coir industry which has low unit value realisation and compressed profit margin cannot absorb the appreciation of rupee.

To overcome the precarious situation, the Coir Board has suggested certain measures to be taken by the RBI and the Central Government.

These measures include making available export financing in foreign exchange, check in increasing ocean and inland fright rates and reducing packaging credit which was enhanced to 10 per cent from 7.5 per cent.

The Board also made suggestions to reduce rates for pre-shipment and post-shipment credit, if not possible, to factor into Duty Drawback scheme, reimburse unrebated service tax and fringe benefits through a special scheme, restore provision under sec 80HHC of the Income Tax Act and bring down the customs duty on import of capital goods.

Meanwhile, in a statement here, Mr Jose said the appreciation was more than 12 per cent since August this year and the coir exports had dwindled by around 19.22 per cent in the last two months.

The rupee appreciation, enhancement of PLR rate in respect of packaging credit, term loan, pre-shipment/post-shipment credit by banks, unrebated service tax and fringe benefit tax had put the industry in doldrums, he added.

The Board had also taken up the issue with the Union Finance and Commerce Ministries for appropriate remedial measures.

UNI