Slow Down in Engg export growth
The rupee appreciation has hit engineering exports, whose growth rate is projected at 12 per cent for 2007 against 33 per cent last year. According to the Engineering Export Promotion Council (EEPC), the growth target for the year is 15 per cent if the average rupee value is 40.50 to the dollar. "With further appreciation on the anvil, the growth rate is set to dip by another one to two percentage points against the target of 15 per cent growth," said Rakesh Shah, chairman of the EEPC. Engineering exports have overtaken gems and jewellery to comprise around 20 per cent of India's export basket. A 15 per cent growth this year means engineering exports will be $31.5 billion.
The commerce ministry has recently revised the export target this year from $160 billion to $145 billion. However, specific sectoral targets, such as for engineering or gems and jewellery, have not been revised. Bengal has a 6-7 per cent share of the country's exports. "Bengal's engineering exports will retain their national market but will definitely take a hit in value terms," Shah added. However, an area of concern is high ocean freight rates demanded by foreign shipping lines in the last couple of months for carrying engineering cargo to the European Union and the Gulf states from Calcutta.
Shah observed that freight rates have increased by 60 to 150 per cent between April and September 2007 for exports from the Calcutta port, which are in contrast to the relatively stable rates in Mumbai. The bunker adjustment factor and the currency adjustment factor charges are being raised along with the freight rates, Shah said.
Source: The Telegraph
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