Exporters advised to cope with stronger dollar

The government cannot do anything to stop the appreciation of the rupee against the US dollar though it was causing problems for Indian exports.

L Mansingh, director general of foreign trade (DGFT), said the Centre was aware of the problem but could do little. The issue was before the Reserve Bank of India (RBI) and ministry of finance (MoF). "Exporters have to live with it," he said in Kolkata on Friday.

The appreciating rupee was a mixed blessing, as it helped the trade deficit. "Imports are growing faster than exports, so a stronger rupee is beneficial. The good thing about our export is that it is not as dependent on imports as many other countries," he said at a session organised by FICCI (eastern region).

The rupee has gained close to nine per cent in the last fiscal to around Rs 44 level a dollar after hitting a high of Rs 43.30 earlier this year. Exporters said they were finding it increasingly difficult to honour export commitment as Indian products were becoming less competitive.

Mansingh sounded optimistic about the possibility of India cornering one per cent of international trade ahead of scheduled 2007.

"We had to grow at over 12 per cent annually in dollar terms to reach the target of one per cent share in international trade under the 2002-07 export policy target, but we are ahead of that," he noted.

Exports grew by 22 per cent in dollar terms in 2002-3. In this fiscal, till February, growth was 14 per cent. India now had to benchmark itself with its main competitor, China which had a share of three per cent in global trade on standalone basis and seven per cent if taken together with Hong Kong.

"China's export growth rate is higher than us, so the gap between two is widening," Mansingh pointed out.