With the ever appreciating rupee, exporters will now have to hunt for alternative ways to keep their goods competitive in the global scenario.
Although the government has given certain sops to cushion the impact, there is apprehension in North Block that too many exemptions can attract the attention of the watchful WTO.
I believe that exporters will now have to adopt alternative mechanisms including forward contracts, shifting to other currencies, and establishing protective clauses in their contracts to safeguard their interests.
Apart from these measures, exporters should do more business with regions like West Asia and the European Union, which will help them to partially nullify the impact of the strengthening rupee vis-a-vis the US dollar.
Even industry bodies including FICCI who had conducted a survey are of the opinion that exporters will now have to look towards the markets of West Asia, Africa, Southeast Asia, the UAE, and the European Union.
Having said that, the government should now focus on improving the factors that can lower the cost of production of goods. Infrastructure is a key sector where the government has to deliver on a war-footing. Improved infrastructure can help in lowering production costs considerably, which in turn will go a long way to give the exporters an edge over other competitors.
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