Millennium Post

Falling rupee boon for manufacturing exporters

While the depreciating rupee is giving sleepless nights to many, it is a huge opportunity for India's manufacturing exporters as their goods are now cheaper in dollar terms, the Federation of Indian Micro and Small and Medium Enterprises (FISME) said.

'The currency of India's major competitor China is getting stronger by the day which means their goods are becoming costlier in terms of dollars,' FISME president V K Agarwal said.

'The currencies of other competing countries such as Vietnam, Thailand and Indonesia have also depreciated but much less than what the Indian rupee has done, thus adding to Indian competitiveness,' he added.

According to Jagannadham Thunuguntla, strategist and head of research in brokerage firm SMC Global, while firms importing components are having a tough time, this is a boon for SMEs exporting products.

'The problem lies in import, but small enterprises who are into exporting will benefit almost by 20 to 22 per cent due to the rupee depreciation,' Thunuguntla said.

The rupee fell to a record low of 56.40 against dollar last week owing to the high inflation and huge current account and fiscal deficits. Economic advisor in ministry of finance Kaushik Basu has also called depreciation 'an opportunity' to export more.

FISME feels that Indian manufacturers must exploit this currency-generated price advantage to penetrate new geographies such as the ASEAN group of countries, Africa or Latin America.
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