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Falling Rupee Fails To Cheer Exporters Hit By Demonetisation

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Falling Rupee Fails To Cheer Exporters Hit By Demonetisation
A dollar can now buy more of 'Made in India' products and that makes our markets more attractive to buyers.

That's how experts view the current fall in rupee's value to a dollar. On Saturday, former Prime Minister Manmohan Singh too urged India Inc to focus on exports. "Although India is growing at the annual rate of 7-7.5 per cent per annum, there needs to be considerable increase in the rate of international trading sectors, particularly exports," said Dr Singh at a conclave of PHD Chamber of Commerce, a leading industry body for the states of Punjab, Haryana and Delhi.

The value of the rupee has declined in the past few weeks in expectation of tighter monetary policy by the Federal Reserve. It is seen as possible response to president-elect Donald Trump's proposed policies of tax cuts.
Experts say it is now the time for India to push exports,

"In fact, for last 4 to 5 months, the Federation of Indian Exporters Organization has been lobbying the government of India to depreciate (the rupee) a little," says PH Ravi Kumar of Bharat Financial Inclusions, who adds, "Normally, a devaluation helps the exporters a bit."

In Moradabad, barely 180 km from Delhi that's known for its export of decorative brass wares, the mood is quite different. 

The cash crunch has hit hard. Anwar Samsi, who runs an export business of brass wares, says he may not be able to honour delivery deadlines.

"I have about Rs 60 crores worth exports, so do you think 50,000 will be enough for a week? It is quite impossible as the amount isn't enough for a day," says Mr Anwar. "We take a time of 60 days from the customer, according to the order. Even the biggest order, we have to ship from India, from Bombay, within 90 days. How will we meet this deadline if production slows down?"

The Commerce Minister, who met exporters earlier this week, made it clear that she is working with the Finance Ministry to ease things for the export sector.


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