Currency fluctuations may hit exports: FICCI

NEW DELHI: Indian exports may loose its growth momentum again due to currency fluctuations and rising raw material costs, a survey conducted by industry body Ficci said.

Expected rise in interest cost due to introduction of base rate mechanism and slowdown in Euro zone are some of the other reasons that may slowdown exports that grew 35.1% in May over the year-ago period, the survey said.

Exports have seen a moderately positive growth for the past few quarters but decline in orders from EU has started to hit the exporters. Demand from European buyers has slowed down and in some cases they have asked the Indian exporters to withhold supply. With softer demand in the large markets of Europe and US, the exporters are now exploring alternate destinations.

A little over half of the respondents said that their order book is unlikely to improve in the coming months. About 55% of those surveyed said they might hike their prices in the near term as they are facing a squeeze on their margins.

To protect their business, exporters are not converting dollars to rupee in anticipation of a better currency position in the coming quarters.