Nath says Re hurting exports, wants PM to intervene

With rupee scaling new heights, the commerce ministry has sought Prime Minister’s intervention to cushion its impact on exporters.

With rupee scaling new heights, the commerce ministry has sought Prime Minister’s intervention to cushion its impact on exporters. “Commerce and industry minister Kamal Nath has written to the Prime Minister Manmohan Singh expressing concern over the rising rupee and requesting his intervention,” commerce secretary Gopal K Pillai said at an ‘open house’ with Federation of Indian Export Organisations (FIEO).

He said that the government is aware of the impact the appreciating value of the rupee against the dollar is having on the exporters, but measures to check its rise would need to be taken at the highest level.

“People at the highest level are aware and something is being done… we will take action and it is of concern to us,” Pillai added. The rupee has touched a nine-year high of Rs 40.55 to a dollar and exporters have seen their margins erode by 10 per cent. They said if the rupee continues to appreciate, exporters’ competitiveness would suffer and they might be thrown out of the market.

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Earlier in the open house on the Foreign Trade Policy (FTP), Pillai said the notification on refund of service tax on exports at post production stage would come in the next couple of weeks. “The notification will have the list of services on which tax would be refunded and the means of how it would be done,” he said. The exemption of service tax on merchandise exports was one of the major announcements of the FTP.

Pillai said the government’s top priority was to reduce transaction costs for exporters as this would do more for boosting exports than various incentives in the long run.