Lowering export target inevitable

NEW DELHI: A day after Commerce Secretary GK Pillai said the export target of 160 billion dollars for 2007-08 was difficult to achieve, exporters body FIEO on Tuesday said lowering the goal post was inevitable in the backdrop of unabated strengthening of the rupee.

"Lowering of export target to 140 billion dollars is inevitable in view of strengthening of rupee. It is a foregone conclusion," Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta said here.

He said expansion plans of many export firms have been shelved and the closure of a large number of tiny, cottage and small sectors would lead to unemployment.

"It is estimated that eight million jobs will be lost due to lower exports," Gupta said requesting the government to take effective steps to restore competitiveness of Indian exports.

Over 10 per cent rupee appreciation since March this year has resulted in erosion of margins for exporters. The government has taken several measures like increase in the tax refund rates in the popular Duty Entitlement Pass Book Scheme and exemption from service tax in select areas. It has also announced re-introduction of interest rates on the Exchange Earners Foreign Currency Account.

However, the constant inflow of funds from foreign institutional investors has kept the pressure on the dollar.

The government had fixed an export target of 160 billion dollars in April this year. Against a growth of 25 per cent last year, the export growth for April-August has declined to 18 per cent.