Date:19/04/2006 URL: http://www.thehindubusinessline.com/2006/04/19/stories/2006041904190700.htm

Back Exporters to feel the pinch

Our Bureau

Mumbai April 18

, The hike in the ceiling interest rate on export credit in foreign currency by 25 basis points in the RBI's Annual Policy statement on Tuesday has not come as a surprise for exporters.

"We were expecting this kind of a hike. What else can the RBI do, when interest rates globally are going up," says Mr Sanjay Kothari, former chairman of the Gem and Jewellery Export Promotion Council.

Not much impact

Exporters feel that the hike in the interest rate will not make any significant impact on India's export figures. "Exporters will feel a pinch, but I do not think it will have any impact on our industry's exports," Mr. Kothari said.

The gem and jewellery industry takes an average of over $3 billion as export credit in foreign currency, with ABN Amro and State Bank of India being the leading financers. The industry exported a total of $16.6 billion in the last fiscal, representing a lower growth of 6 per cent as compared to the previous fiscal.

Our Coimbatore Bureau reports: The move to maintain status quo relating to bank rate, repo rate or cash reserve ratio in its annual credit policy would continue the growth momentum and buoyancy in the economy, said the Tirupur Exporters' Association.