'Declining Re not good news for exports'

'Declining Re not good news for exports'

'Declining Re not good news for exports'

Debunking the conventional argument that a fall in rupee against the dollar augurs well for Indian exports and leads to enhanced remittances, the director general of foreign trade (DGFT) Anup K Pujari said that given the high import component in India's top three export items, falling rupee offsets the gain.

“The top three exports from India include petroleum products, gems and jewellery, and pharmaceuticals. In the first two, the import component is high and consequently the cost of import goes up if the rupee depreciates. Therefore, there is not much benefit if the rupee falls resulting in enhanced exports,” he told at the “Export Excellence Awards 2013” organised by the Federation of Karnataka Chambers of Commerce & Industry (FKCCI) here on Saturday. A stable exchange rate is the best bet for India from trade perspective, according to him.

He attributed the record trade deficit in May to a whopping decline of $800 million in gold jewellery exports, year-on-year (y-o-y).

India's gold jewellery exports (provisional) stood at $514 million in May this year, down from $1.33 billion in May last year.

Merchandise exports in May this year declined 1.1 per cent y-o-y to $24.5 billion even as imports increased 6.99 per cent to $44.65 billion leaving a yawning trade deficit of $20.15 billion.

Pujari said that port capacity expansion to remain almost static this fiscal restraining volume growth, the way forward for India to add value to its exports to achieve the targeted 25 per cent growth for this fiscal.

He said that with no signs of significant improvement in global economy, predominantly the US, Europe and Japan, the situation is “not bright” for India +and added that the government is doing its best to streamline export procedures to bring down transaction costs for exporters.

New tool rooms for Karnataka

The union minister for MSME, K H Muniyappa on Saturday told reporters that the Centre will be opening 15 new tool rooms in the coming months at a total cost of about Rs 2,200 crore, with funding from the World Bank. “Two of these will be in Bangalore (Devanahalli) and Kolar.”

He added that his ministry imparted skills training to about 6 lakh persons during 2012-13 and is committed to make efforts to increase the share of MSME in exports from the current 36 per cent to about 40 per cent.