New Delhi: Engineering exporters said on Sunday that Indian currency is over-valued which is making exports less competitive.
“Rupee depreciation has just been equal to the rate of consumer price index (CPI) based inflation, giving absolutely no advantage to the exporters on exchange rate whereas the cost of production and transactions have risen, leaving Indian exports less competitive in the international market,” said Engineering Export Promotion Council of India (EEPC).
It said that Indian exporters were also paying real interest rates much higher than the competitive peers like China, Malaysia, Argentina and Mexico.
“The analysis of engineering exports shows that between July 2015 and July 2016 the Rupee depreciation is just about the same as the Cost Price Index inflation.
“To the extent of rising cost dof production, Rupee inched up; but on the other hand, the pricing power of Indian exporters has not been improving in the tough global markets,” said EEPC.
Commenting on the currency play and its impact on the exports, EEPC chairman T.S. Bhasin said that while the pace of decline in the exports has narrowed down, the development has to be seen on a very base year-on-year since the drop in shipments had started some 20 months ago.
