In order to help rupee-hit exporters tide over the hardships, the government has shown willingness to allow exporters to invoice their orders in Indian rupees. This is part of a slew of measures being considered by the government to soften the blow of a strengthening rupee on exports, and thereby on employment in the sector. The rupee has gained over 12 per cent against the dollar over the past one year. Initially, the government could make rupee invoicing mandatory for sectors like textiles, leather, handicrafts and marine products, which are the worst affected. Rupee invoicing may also be made mandatory for certain schemes like the Advance Licence Scheme and Duty Entitlement Passbook Scheme. Invoicing transactions in rupees would help exporters obtain an assured value for goods and services, irrespective of fluctuations in the value of the dollar.The step would also allow exporters to raise fresh bills in rupees instead of dollars, citing national requirements. However, the commerce ministry will have to tread a delicate line as WTO norms could view the measure as a government subsidy. The commerce ministry would now have to work with the Reserve Bank of India and the finance ministry to draw up the necessary regulations.The commerce ministry is currently studying whether making rupee-invoicing mandatory would fall under the currency retention scheme (providing a bonus for exports) or similar schemes prohibited under WTO norms. Meanwhile, invoicing in dollars has fallen from 85 per cent of total exports in December 2006 to 76 per cent in June 2007 and to a further low of 65 per cent in December 2007, according to data from Federation of Indian Export Organisations. Exporters have shifted to invoicing in euros following international trends and also in rupees and yen, said FIEO director general Ajay Sahai.Dollar effect•Could be mandatory for textiles, leather, marine & handicraft products•May also be mandatory for Advance Licence Scheme and DEPB Scheme•Commerce min studying if it would run afoul of WTO norms•Invoicing in dollars has fallen from 85% to 65% in one year to Dec ‘07
