Govt looking at ways to fix mfg sector’s woes

NEW DELHI: The government is seeking a solution to woes of domestic manufacturers hit by the recent appreciation of the rupee against the dollar.

Cheap imports, resulting from the rupee’s rise against the dollar, is hurting Indian manufacturers, besides exporters, commerce and industry minister Kamal Nath said  on Monday. “We want to discuss with the manufacturers the difficulties they are facing from cheaper imports and find a way out,” Nath said. He declined to elaborate saying “exchange rate is a sensitive matter”.

The comments surprised many because it was believed that manufacturers stood to benefit from a strong rupee, as it would make imports of inputs and machinery cheaper. Also, cheaper imports were considered to be in line with the government’s efforts at fighting inflation and keeping a check on the domestic prices of manufactured goods by greater competitive pressure from imports.

After the rupee rose to a 9-year high against the dollar earlier this month, Nath had written to the Prime Minister seeking steps to arrest the appreciation of the rupee as it was eroding India’s export competitiveness.Industry and exporters’ organisations have pointed out that the appreciation of the rupee against the dollar by almost 10% in the current fiscal  has started adversely impacting exports of textiles, gems and jewellery, leather and marine products.