Policy tactical, strategy needed to exploit weak rupee: FISME

New Delhi, June 7 (ANI): While welcoming the measures announced in the annual supplement to India's foreign trade policy, the Federation of Indian Micro and Small and Medium Enterprises (FISME), India's leading MSME organisation, has, however, pointed out that these measures are at best tactical and they have to be supplemented with a strategic thrust to take advantage of the depreciation of the rupee which is here to stay in the short and medium term.

"We welcome the initiatives announced in the policy, especially the decision to extend the 2% per cent interest subvention scheme for another year and expand its coverage to include other labour intensive sectors namely toys, sports goods, processed agricultural products and ready-made garments, but these initiatives are at best tactical not strategic," said FISME President V.K. Agarwal.

According to FISME, the depreciation of the rupee - over 27% fall during the last 13 months, is an opportunity that should not be allowed to go waste. It does not often happen that fall in the Indian currency is the highest among our competitors. The Vietnam Dong has depreciated only by 0.4%, Malaysian Ringgit by 4%, Thai Baht by 4% and the Indonesian Ruppiah by 8% during the same time period.

"Now that Indian exports have become more competitive, a well thought-out strategy is needed to push our products and services in countries where we have been outcompeted in several product categories especially in ASEAN, African and Latin American markets. Such a strategy inter-alia should include a big push for trade expositions for select sectors, inviting large number of importers from these countries to India and taking initiatives to ease non-tariff measures including working out mutual recognition agreements for standards and augmenting financial and transportation architecture," Agarwal said.

"By merely continuing with the incentives announced last year, we cannot hope to exploit the historic opportunity represented by the depreciation of the rupee. The fact that export growth has slowed down in the last couple of months despite the weaker rupee is a clear indication that a strategic thrust at removing non-tariff hurdles to penetration of new markets where our products have at last become competitive is urgently needed," he said.

"The government must also take special steps to help Indian products, especially from the SME sector, to penetrate markets where they were hitherto uncompetitive but have now become competitive because of the weaker rupee as compared to the currencies of our competitors, especially China and other Asian Tigers," Agarwal said.(ANI)