Raising concerns over the inflation outlook of the apex bank RBI, engineering exporters' body EEPC India said the government needs to check the prices of crucial raw materials.
"RBI's inflation outlook which is on the higher side, is very much a matter of concern for the exporters as the prices of raw material like steel for the manufactured exports have run up excessively, hitting the competitive advance of the Indian shipments," EEPC India Chairman Ravi Sehgal said in a statement issued here today.
The RBI increased its inflation estimation to 5.1 per cent in Q4 FY18 from earlier estimate of 4.3-4.7 per cent in the second half of fiscal 2017-18.
"While the RBI's commentary about the global economy sounds positive with reference to the developed markets, the domestic issues regarding rising prices in the domestic economy, would have a negative impact on our competitive advantage, especially for the engineering exporters," said the EEPC India chairman.
He said, the council has been at the forefront of reminding the government about the need to check the prices of crucial raw material like steel and now that the RBI has also flagged the issue of inflation running high, an effective government intervention would be advisable.
"While the decision of the RBI to keep the policy rates was on the expected lines, the net borrowing cost for the exporters remains quite high and comes in the way of fully exploiting the opportunity given by the global growth scenario," Sehgal said.
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