The Hindu Business Line : 80 lakh jobs at risk due to strong rupee: FIEO

Exports hit
Export realisation has declined by 12 per cent for chemical industries, 6-6.5 per cent for textile industries.
Exports are likely to fall by 20-25 per cent for processed food and agro-based products, electronics and electrical goods too.

Our Bureau

Chennai, July 3 As many as 80 lakh jobs are at the risk of being lost due to loss of export business because of the appreciation of the rupee. If the Government does not take steps immediately to check the rupee’s rise, about $12.5 billion of exports would be lost in the current year, estimates the Federation of Indian Export Organisations (FIEO).

“Fifteen per cent of the exporters would need to cut down 50 per cent of their workforce,” Mr Ganesh Kumar Gupta, President, FIEO, said at a conference here.

The FIEO Vice-President, Mr A. Sakthivel, observes that with the US running a current account deficit of seven per cent of GDP, the dollar would only slide further. The only option with Indian exporters is to balance the impact with cost-cutting and moving up the value chain.

“But, in view of wafer thin margins, even that seems to be a difficult task,” he said.

The rupee has appreciated by more than 14 per cent from its low of 47.04 touched in July 2006. More than half the appreciation came over in the past two months, resulting in erosion of export realisation by 12 per cent for chemical industries, 6-6.5 per cent for textile industries. Exports are likely to fall by 20-25 per cent for processed food and agro-based products, electronics and electrical goods too.

Besides, hardening interest rates have further affected exports.

Hits all segments

According to Mr Navratan Samdria, Chairman, India Exposition Mart and past Chairman of the Export Promotion Council for Handicrafts, though the rupee appreciation has resulted in loss to all segment of exports, traditional sectors such as handicrafts, incense sticks are the worst hit as there is no or very less import content.

Talking on behalf of the synthetic textile exporters, Mr Sanjeev Saran, Chairman of the Synthetic & Rayon Textiles Export Promotion Council, said the industry last year exported goods worth $2.3 billion, and plans to take it to over $3 billion this fiscal and to $6.8 billion by 2010.

The council has been making all-out efforts to achieve the target. But, if the present trend continues for a few more months, it might be difficult for the industry to even repeat last year’s performance.

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