Re rise threatens existence of Punjab inds
Industries like light engineering industry, garment and IT are feeling the maximum heat because of the volatility in rupee value against dollar.
By PTI |
CHANDIGARH: Sharp appreciation of rupee against US dollar is threatening small scale manufacturing and exporting firms of Punjab, with the industry anticipating almost 10 per cent decline in margin and abandoning of several expansion plans.
Industries like light engineering industry, garment and IT are feeling the maximum heat because of the volatility in rupee value against dollar.
"The margins are definitely going to be hit as a result of rupee appreciation and it will especially hit small scale manufacturing sector which do not have the capacity to absorb the shock. The current surge in rupee will force industry to work on breakeven position," Engineering Export Promotion Council Regional Chairman S C Ralhan said.
Since majority of the industries in Punjab run on small scale, it is not viable for them to avail the facility of hedging system as being done by big companies, an industry analyst said. Punjab has about 2 lakh small and 600 large and medium units with total export of Rs 12,000 crore.
"Rupee appreciation would certainly create bottlenecks in the growth of small-scale IT firms by creating fund shortage for them," an IT expert said.
"Moreover, the weakening of financial position would also compel IT companies to defer their expansion plans," said IDS Infotech Managing Director Partap Aggarwal.
The pressure of rupee appreciation is also more visible on IT companies as majority of their customers are US-based.
"Even as we are trying to explore other markets such as Europe, dependence on the US will always remain," he said.
Although industries were trying hard to soften the impact by reviewing prices for new orders, it was not easy. "We are trying to review the prices while negotiating with our buyers but they are reluctant," said a garment exporter.
Industries like light engineering industry, garment and IT are feeling the maximum heat because of the volatility in rupee value against dollar.
"The margins are definitely going to be hit as a result of rupee appreciation and it will especially hit small scale manufacturing sector which do not have the capacity to absorb the shock. The current surge in rupee will force industry to work on breakeven position," Engineering Export Promotion Council Regional Chairman S C Ralhan said.
Since majority of the industries in Punjab run on small scale, it is not viable for them to avail the facility of hedging system as being done by big companies, an industry analyst said. Punjab has about 2 lakh small and 600 large and medium units with total export of Rs 12,000 crore.
"Rupee appreciation would certainly create bottlenecks in the growth of small-scale IT firms by creating fund shortage for them," an IT expert said.
"Moreover, the weakening of financial position would also compel IT companies to defer their expansion plans," said IDS Infotech Managing Director Partap Aggarwal.
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The pressure of rupee appreciation is also more visible on IT companies as majority of their customers are US-based.
"Even as we are trying to explore other markets such as Europe, dependence on the US will always remain," he said.
Although industries were trying hard to soften the impact by reviewing prices for new orders, it was not easy. "We are trying to review the prices while negotiating with our buyers but they are reluctant," said a garment exporter.
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