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Nine export promotion councils, which together account for over 50 per cent of the country's exports, have expressed their inability to meet the targets set for them by the government for 2007-08 due to the rise in the value of the rupee against the dollar.

Almost 70 per cent of India's exports are in dollars. In the last one month, the rupee has appreciated by over 6 per cent on the back of strong capital inflows. Most projections talk of the rupee strengthening further against the dollar in the next 3-6 months. A falling dollar erodes the competitiveness of Indian exports in the world markets.

"The issue is of concern to us. Very soon we will meet industry representatives and exporters to find a way out of it," said Commerce Minister Kamal Nath at a Confederation of Indian Industry (CII) function today.

Every year, the government sets export targets for these councils, the non-profit organisations set up by the government to boost exports, after consultations with them. Targets for two key councils "" the Engineering Export Promotion Council and the Gems and Jewellery Export Promotion Council "" are yet to be set owing to the fall in the dollar.

The target for the Apparel Export Promotion Council for 2007-08 has been fixed at $12.5 billion by the textile ministry, up 31.57 per cent from $9.5 billion in 2006-07. "This is impossible and we have conveyed our concerns to the ministry. At the most, we can reach the $10.5 billion mark," said Anil Bamba, deputy secretary general, Apparel Export Promotion Council.

Councils pertaining to cotton textiles, handloom and powerloom are also sceptical of the targets that have been set for them. "The current circumstances make it practically impossible for us to achieve the combined target of $6.35 billion, which is 27 per cent higher than $5 billion in 2006-07. Margins have already taken a hit of 6 per cent due to the strengthening rupee," said Siddharth Rajgopal, executive director of the Cotton Textile Export Promotion Council.

Even in the case of silk exports, which surpassed its export target of $700 million by $50 million in 2006-07, there is doubt. "Under the present circumstances, the $890 million target in 2007-08 will be quite steep for us," said an official from the Silk Export Promotion Council.

It is the same story for handicrafts too, where the target has been set at $4.73 billion, against the exports worth $3.7 billion in 2006-07.

"Exporters of wood works based in Jaipur and Jodhpur are the hardest hit as there are no imported components in their products," said Rakesh Kumar, executive director of the Export Promotion Council for Handicrafts.

Clearly, it is going to be a tough challenge for the commerce minister to achieve the target of $160 billion worth of exports for the year.