Finance Minister P Chidambaram has ruled out any more sops for exporters hit hard by the rising rupee asking them to get used to stronger currency as dollar inflows would continue to grow. The government had announced a Rs 1,400 crore package in July for exporters.

“We have taken note of short-term pain of exporters and we have given them a package. We hope that they will quickly adjust to new level of rupee,” Mr Chidambaram told PTI.

Exporters are demanding more sops to deal with rupee appreciation against the US dollar, complaining that their realisations have gone down due to rupee effect and prices they are quoting for new orders are turning away customers.

The currency has appreciated about 9 per cent since March. From lows of over Rs 45 in October-November last year, it is now ruling slightly above Rs 40.

Mr Chidambaram observed that there could not be a situation where economy grows but rupee remains weak. Exporters should take this into account while booking new orders, he explained. “When they book new orders, they should factor these things into account.

You cannot say economy should grow but the rupee should not become strong,” he said, adding the rupee has become strong against US currency because of dollar’s weakness. “It is only vis-a-vis the dollar that rupee has become strong. Rupee has not become very strong against other currencies,” he pointed out.

The value of dollar against rupee is coming down as fund inflows are increasing and Reserve Bank of India is not buying dollars to check the rise in domestic currency. The central bank has reduced its intervention because it wanted a check on money supply that was fuelling inflation.

Exacting cost

India’s reserves have mounted to about $225 billion thanks to huge inflows from  foreign institutional investors, who have remained bullish on stock markets, and foreign direct investments going into industry and services. Besides, the country is receiving big chunks of remittances from non-resident Indians.

“How can you tell people do not bring money into India. Can you tell exporters do not bring money into India... Can you tell families do not remit money into India?” Mr Chidambaram chided.

“No developing economy can say I do not want capital inflows into the country. China does not say that. We have to learn to manage these inflows. It is difficult... it exacts a cost. But we must factor all that and learn to manage inflows,” he said.