High interest rates to hit engineering exports: EEPC

KOLKATA: Hike in interest rates will have an adverse impact on growth in engineering exports in the third and fourth quarters of the current fiscal, the trade body EEPC India said today.

"The high interest rate regime will definitely impact engineering goods export. The growth in the Q3 and Q4 period will be lower than the first half of the year which saw robust trend," Rakesh Shah Chairman of the EEPC task force for exports said.

The engineering exports grew by 60 per cent in the second quarter over the year-ago period. During the first quarter, the consignment saw year-on-year jump of 94 per cent.

Shah, however, added, "The robust growth in the first six months will compensate for the remaining period of 2011-12 to meet the annual growth target of 25 per cent."

On the interest rate scenario, he said the government should re-introduce interest rate subvention.

"Our interest rate should not be more than 8 per cent," he said.