Rupee appreciation may hit cotton textile exporters
Published on Sat, Apr 28, 2007 at 11:57 | Source : Moneycontrol.com
Updated at Mon, Apr 30, 2007 at 10:29
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Rupee appreciation may hit cotton textile exporters
On current reckoning, rupee appreciation could cut into the earnings of cotton textiles and apparel exporters. The target set for cotton textile exports for this fiscal is $5 billion.
On current reckoning, rupee appreciation could cut into the earnings of cotton textiles and apparel exporters. The target set for cotton textile exports for this fiscal is $5 billion. "We will, in all probability not reach this target," said Mr Prem Malik, Chairman, Cotton Textiles Export Promotion Council (Texprocil). "Consequently, the next year's target of $6.3 billion will not be achievable either," he added. Over the last month the rupee has appreciated against the dollar by nearly 8 per cent.
Slowing Down
India faces competition in the textiles sector from China, Pakistan and Bangladesh. While China's currency has appreciated slightly in the past few weeks, Pakistan and Bangladesh's currencies have dropped by 1-2 per cent, making them more competitive. "At the company level, this is a very disturbing situation. Some contracts have also been cancelled," said Mr Siddhartha Rajagopal, Executive-Director, Texprocil.
Local inputs form 97 per cent for the cotton textiles and apparel industries. "It is an industry where there are no benefits from imports," said Mr Malik.
Texprocil has pleaded with the Government to stop the slide of the rupee against the dollar. If not, it could lead to projects under the Technology Upgradation Fund Scheme (TUFS) being stranded with investments slowing down.
India faces competition in the textiles sector from China, Pakistan and Bangladesh. While China's currency has appreciated slightly in the past few weeks, Pakistan and Bangladesh's currencies have dropped by 1-2 per cent, making them more competitive. "At the company level, this is a very disturbing situation. Some contracts have also been cancelled," said Mr Siddhartha Rajagopal, Executive-Director, Texprocil. 
