Rupee depreciation not helping exporters: EEPC India

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SME Times News Bureau | 18 Jul, 2013
A sharp dip in rupee value against dollar and other major currencies has yielded no gains to exporters who are reeling under a severe slowdown in global demand and have seen their shipments drop, calling for very urgent measures from the government and the industry, EEPC India Chairman Aman Chadha said Wednesday.

"We are facing considerable demand problem in external markets and there is, so far, no visible impact of the currency depreciation on our exports," Chadha said in his presentation before senior officials of the Commerce Ministry in New Delhi on Wednesday.

While rupee has depreciated about 10 per cent in the last two months against the US dollar and other major currencies, exports of engineering products, among the largest segments of the Indian merchandise export basket, too sent went down almost in the same ratio, instead of benefitting from currency erosion, EEPC India, formerly known as Engineering Export Promotion Council said.

India's overall engineering exports fell by 9.26 percent to USD 4223.29 million in June this year from a revised figure of USD 4654.47 million achieved during June 2012. The decline has exacerbated from -3.15 percent in May 2013.Average growth rate for the first quarter of 2013-14 was -7.53 percent.

Important engineering export segments like iron and steel, products of iron and steel, copper and copper products, motor vehicles and aircrafts, spacecrafts and parts have witnessed sharp decline in exports.

Out of the 33 engineering panels, 19 engineering panels recorded negative growths in the month of June 2013 as opposed to 16 such panels in the month of May 2013.

Faced with a difficult situation in the developed markets of the US and the European Union, the two main destinations for Indian markets, the EEPC is seeking new markets in Africa.

While the overall trade with Africa is much below the potential, India and Africa can help each other tide over the impact of global slowdown, Chadha said.

The continent is recovering from the global crisis of 2009 and it is sustained even though a new global slowdown is constraining Africa's growth, like that of many other regions. With the gradual recovery of North African economies, Africa´s average growth is expected to rebound to 4.8 percent in 2013.

"While keeping an eye on new economic storm clouds in Europe, both India and Africa must keep its focus on reforms that encourage growth and foster bilateral trade and investment between our two regions," EEPC Chairman said.