Relief package to combat rupee rise

The plantation sector, especially the coffee industry, is to benefit from the special relief package planned to help industries hit by the appreciating rupee.

Addressing reporters at the 49th annual conference of the Karnataka Planters' Association, Union Minister of State for Commerce Jairam Ramesh, said, "In the wake of rupee appreciation, a special package is being worked out for the labour intensive and non-import dependant sectors in consultation with the finance minister."

"Along with plantation, the other sectors to get relief are textiles, leather and handicrafts," he added.

"If the capital flows continue the way they are, then we really have to think of protecting the competitiveness of these industries. For this, the commerce ministry is planning to give relief in the form of pre-shipment credit, incentives for packaging, and customs fees, etc. Relief to the tune of 2 to 3 per cent makes a lot of difference," he said.

Currently, the coffee industry is not impacted by the appreciating rupee. But the commerce ministry is concerned if it appreciates further to Rs 36 against a US dollar.

According to G V Krishna Rau, chairman, Coffee Board, "There has been no impact on the coffee industry so far. Realisation-wise there has been no impact as coffee prices went up and the dollar depreciated in the global trade. Coffee price was up by 16 per cent while the dollar depreciated by 12 to 13 per cent."

"We do not see coffee prices going up the way it did last crop year, hence a plea for special package to protect the industry as it is dependant on exports," he added.

A special package for these labour-intensive sectors which do not have import content is needed immediately as India is competing with Bangladesh, Sri Lanka and China on prices in textiles; with Vietnam and Indonesia in coffee and tea; and with China in handicrafts.

Ramesh said he has already spoken to Prime Minister Manmohan Singh and Finance Minister P Chidambaram on the issue.