Eurozone debt crisis hits Indian exports.

Recent fluctuations in the value of Indian rupee as a result of Eurozone debt crisis has badly hit India's exports, says a survey by the Federation of Indian Chambers of Commerce and Industry (FICCI). The survey was conducted in April and May covering 278 companies with a varied geographical and sectoral stretch.

As the country’s trade with the European Union occupies a quarter in the overall foreign trade, rupee appreciation against the Euro, is expected to hurt the exports, according to the survey.

 “Large sideways movement in the value of the Rupee against the USD and Euro has led to severe problems. While the sudden appreciation in the value of the Rupee affected the margins adversely as it led to lower realization for exporters,” the survey said.

The pace in exports gained from last year is estimated to take a hit from expected rise in interest costs and rising raw material costs, besides getting major affect from currency fluctuations, according to the survey. “Oil prices too have been gradually increased over time and this is adding to the cost pressure,” the survey report said.

While many exporters saw a drop in orders from the Eurozone countries since the uncertainty on Greece debt crisis started, some exporters have been asked to withhold the dispatch of consignments.

“The evolving situation in Euro zone also does not inspire confidence,” the survey noted.

Many exporters are looking at alternate markets as they do not see immediate improvement in demand in Europe, it remarked.


Source : International Business Times