Strong rupee hits textile sector hard - (Business standard news)

Textile sector is the worst hit by the appreciating rupee, said TC Venkat Subramanian, chairman and managing director, EXIM Bank on Monday.

According to a study by the EXIM Bank, within the textile sector, the silk industry had to bear the maximum burnt as it was 71 per cent sensitive to the hardening of the currency, he said. Cotton and jute were less sensitive to the rising rupee at 23 per cent and 18 per cent, respectively.

More than the rupee appreciation, the speed at which it occurred was more damaging to exports in the country.

“Certain segments were worst affected by the rupee appreciation. The speed at which it occurred was even more harmful, because where as in the last 12 months the currency has gone up by overall 11 per cent, in the last four months alone, 8 per cent appreciation occurred,” said Subramanian.

Indian textile industry was doubly hit by appreciating rupee along with Chinese government’s ability to control the inflating currency, as China is the main competitor of Indian textiles in the global market, he said.

However, sectors like gems and jewellery were not much affected, as India's competitor Thailand also was hurt by the rising currency. For pharmaceutical industry, the sensitivity to the hardening was 32 per cent.

Brazil and China are the main competitors in the sector. Though in Brazil, the currency appreciated more than that in India, the affect was nullified by the Chinese market.

In the IT sector, most companies were up to 90 per cent sensitive to rupee appreciation.