India To Meet 07/08 Export Target If Rupee Stable

India should be able to achieve an export target of $160 billion for the current fiscal year that ends in March if the rupee stays in a 40-41 range to the dollar. Commerce Secretary G.K. Pillai said exports in July likely rose 16 percent from a year earlier, higher than a 14 percent annual rise in June.

The government is scheduled to release the data on Sept. 3, and Pillai said the growth in April-July was also likely to be 16 percent.

We will keep the export target at $160 billion for 2007/08 if rupee stays at 40-41 rupees a dollar, he said after a business conference.

Earlier this month, Trade Minister Kamal Nath said a strengthening rupee was hurting exports and could prevent India from attaining its export target.

The rupee was trading at 41.13/14 per dollar in the afternoon, up nearly 8 percent this year. It hit a nine-year high of 40.20 last month on heavy capital flows into the fast-growing economy, but has since come off on global risk aversion.

The stronger rupee has squeezed export margins for companies such as software firms that get more than half their revenue from the United States, and industry bodies said last month the government may lower the 2007/08 export target to $140 billion.

Exports in May grew an annual 18 percent, slower than a 23 percent rise in April.

Last month, India announced a $320 million relief package for exporters to soften the blow from a stronger rupee.

By 2012/13, we are looking at $300 billion in exports and $400 billion in imports, Pillai said. Exports from special economic zones could touch 1.5 trillion rupees ($36.5 billion) by March 2009.

Source : www.indian-commodity.com