A rising rupee, hardening interest rates and costly inputs are taking a toll on the profit margins of Indian exporters, a survey carried out by a leading industry lobby group showed on Sunday.
It said the small and medium enterprises which form a large chunk of India’s exporters are the most severely hit due to the appreciation of the rupee against the dollar.
The survey, undertaken by the Federation of Indian Chambers of Commerce and Industry (FICCI), covered 304 companies in sectors such as automobiles, consumer durables, food and food processing, gems and jewellery, textiles, handicrafts, metal and metal products.
The FICCI survey showed there was a concern that the rupee will continue to maintain its current level in the next few months. It said exporters were on the lookout for clients and markets where the euro could be replaced as a medium of exchange for the dollar.
Trade experts say a rise in the rupee not only takes the wind out of exports but also sparks fears of cheap imports flooding the domestic market. India’s overall exports grew a slower-than-expected 8.8 percent to $12.58 billion in March from the same month a year ago as a stronger rupee weighed.
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