India Unveils Relief For Exporters Hit By Rupee Rise

India announced on Saturday more relief measures for exporters hit by a rising rupee currency and added more sectors eligible for lower bank lending rates. A finance ministry statement said the government had broadened the list for the exemption of service tax for general insurance services, technical testing and analysis agency and inspection and certification agency services for exporters.The rupee hit 39.36 per dollar on Thursday, its strongest since March 1998, and has gained 1 percent this week. It is up more than 2.5 percent since the U.S. Federal Reserve cut rates last month and has risen 12 percent in 2007.Its surge has triggered complaints from small and medium-sized exporters, who account for nearly 45 percent of the country''s exports.The government has been monitoring the situation arising out of the appreciation of the rupee, the statement said.The appreciation of the rupee is a reflection, in part, of the growing strength of the economy and has positive economic benefits by way of cheaper imports.However, the rapid appreciation of the rupee in recent weeks has adversely affected exporters who had contracted export orders earlier. Last month, the government announced exporters would get a refund of the service tax they pay for transporting goods in major ports, and from inland container depots to ports through rail and roads.In July, India announced a $320 million relief package for exporters to soften the blow from a stronger rupee.Jute and carpets, processed cashew, coffee and tea, solvent extracted de-oiled cake, plastics and linoleum have been added to the list of sectors eligible for lower lending rates from banks.The government also announced payment of interest on the Exchange Earners Foreign Currency accounts for exporters and the interest rates would be determined by individual banks.The central bank has raised interest rates and bank reserves sharply in the few months to help curb inflation and strong credit growth.