FDI in Real Estate causing Rupee appreciation: Union Minister

Bangalore, Dec 28 (UNI) Huge funds flowing through foreign direct investment (FDI) into real estate sector was causing Rupee appreciation that had made a negative impact on export focused, labour intensive industry like apparel, textiles, Gems and jewelry, Union Minister of State for Commerce Jairam Ramesh said today.

Speaking to reporters on the sidelines of release of the new Arabica coffee plant variety 'Chandragiri' developed by the Coffee Board here, he said though Rupee appreciation had its benefits, it was causing concern to labour intensive industry that were focused on exports. The short term sentiments in these industries were negative. To help these industry the Union Government had announced three packages during the year, he added.

"Apparel, textile, handicrafts and to some extent gems and jewelry industry is facing problems due to Rupee appreciation.

Huge inflow of Dollars into real estate sector is the main cause for this. So there should be some regulation on FDI in real estate. The Finance Ministry and the RBI should think of bringing some regulation and bring all foreign investments in the sector under the scanner of Foreign Investment Promotion Board," he added.

Mr Ramesh said the IT sector, which was also affected due to Rupee appreciation, could withstand the 'Rupee assault' as they were competitive. "I am not much worried about the IT industry as they are very competitive and can overcome the problem themselves," he added.

UNI