RBI should invest part of forex in banks: Pharmexcil

NEW DELHI: Pharma export body Pharmexcil has asked the government to consider allowing Reserve Bank to invest a part of Forex reserves in domestic banks so that exporters could avail loans at concessional rates to negate the impact of appreciating rupee.

In a letter to Director General of Foreign Trade R S Gujral, Pharmaceutical Export Promotion Council (Pharmexcil) Chairman D B Mody said, "Reserve Bank may give certain portion (of Forex reserves) to various banks in India with proper guidelines".

"This amount should be disbursed to the exporters at the concessional rate of interest (LIBOR +0.25 per cent) or lower so that our competitiveness in the global market slightly goes up," Mody said.

He said rise of rupee during last month had far reaching effect on the pharma industry which could lose substantial export business due to uncompetitiveness.

"We believe that time is not far-off when we may have to retrench manpower and the target given to the government by our council of 30 per cent growth will be virtually impossible to achieve," he said, adding, it may also consequently affect units which had made large capex investments.

Earlier in September, Pharmexcil had written to Commerce and Industry Minister Kamal Nath seeking relief measures such as higher DEPB (Duty Entitlement Passbook Scheme) rates and 6 per cent concessional rate on post- and pre-shipment credits to all exporters.