Rate hike big negative for exporters: EEPC

The 25 basis points increase in the interest rate by Reserve Bank of India is a big negative for exporters, the engineering export promotion body said here today.

"With the rate hike they (exporters) would become less competitive in a tough global market that is already facing the threat of tariff war," EEPC India chairman Ravi Sehgal said in a statement.

"While the RBI Governor Dr Urjit Patel has himself pointed towards increased global risks including the trade war and widening trade deficit, making higher export growth imperative, the rate of borrowing has been moving up. That is certainly not a good news for exporters," he said.

In fact the cost of borrowing is adding to the overall cost of production for exporters, particularly in the engineering sector, due to rising prices of raw material like steel, he said.

If the GDP growth has to be pushed up to the levels as estimated by the RBI, the exporters need to be supported , like their competitors countries like China, he added.