India may miss export target by $15bn: Study

The country is likely to miss the export target of $160 billion for 2007-08 by at least $15 billion due to the strengthening rupee, an Assocham study has said.

The study, which dealt with the currencies of various countries, found that the rupee appreciated by 8.35 per cent between January and June this year, second only to the 9.25 per cent appreciation of the Brazilian real in the same period.

The Thai Baht strengthened by 7.56 per cent, the Russian rouble by 2.08 per cent and the Chinese yuan by 1.82 per cent, the study said. "The currencies of Hong Kong and Taiwan are depreciating, which is a major concern as India competes with both these countries. The appreciation and depreciation vis-a vis the dollar, of all these competing countries, is a determinant and key parameter of the growth of Indian exports," the study said.

"Modest rupee appreciation will contain export growth and if corrective measures are not taken, the rupee may fall below 40 against the dollar in the next few weeks," said Venugopal N Dhoot, president, Assocham.

According to the study, the sectors that are likely to face the brunt of the strengthening rupee are IT and services, textiles, leather, sugar and pharmaceuticals.

The study said the currencies of China, Bangladesh and Pakistan had not appreciated to the extent the Indian rupee had, as a result of which the textile and the leather sectors would face stiff competition.

In the sugar sector, Thailand and China are the country's major competitors and the strengthening rupee, combined with the forecast of increasing surplus, may be disastrous for India, the study notes.