Leading exporters' body EEPC India has raised a red flag on the sharp rise of the rupee against dollar in the last three months which, it says, can have a debilitating impact on exports if the situation persists.
Since the first week of January, the rupee has gained by close to six per cent, eroding significantly the exporters' margins and more importantly the competitive edge against India's trade rivals in the international markets, the EEPC said in a statement.
The RBI and the government are requested to keep a close watch since exporters cannot afford such volatility with pressure on value erosion, chairman of EEPC T S Bhasin was quoted as saying.
He said what was more disconcerting was the fact that the rupee was gaining ground and eroding the exporters' competitive edge when exports picked up smartly in the last few months.
In fact, engineering exports managed to grow by 47 per cent in February despite a strong rupee, but going forward with this kind of strength of the domestic currency, it would be tough, Bhasin observed.
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