Thursday, July 05, 2007

Are any sops required for the exporters in view of the strengthening rupee?

Look at the strong case made out by an editorial in ET about why there is no case for giving more sops to our exporters even in the light of a strengthening rupee.

  1. Barring sectors such as textiles and clothing, there is substantial import content in most of our exports, which mitigates the impact of the rising rupee in that imported inputs become cheaper.
  2. The case is stronger for making the industry more productive. This can be achieved through:
    1. Quality power at affordable prices so that dependence on high cost captive power is reduced;
    2. Better transport and port infrastructure to reduce shipment costs;
    3. Improved administrative systems to bring transaction costs down.