Figure Watch

In fact, the real effect exchange rate of the rupee kept depreciating steadily till 1991-92, when the New Economic Policy was implemented.

In the post-92 period, export growth has slackened since 1995-96. Simultaneously, the real effect exchange rate of the rupee has not depreciated much during this period. In fact, it has appreciated. Thus, at the face of it, the lack of competitiveness of India’s exports (as reflected in the recent slowdown in export growth) may be attributed to exchange rate movements.