Government expands support to leather industry
In light of the significant and continued appreciation of the rupee, India’s government has announced further assistance for the hardest hit export industries including the leather sector.
Having already implemented assistance measures in July and October, the latest deal provides a further 2% rise in pre-shipment and post-shipment credit (in addition to the 2% already provided in an earlier package) until the end of March next year for the leather, handicrafts, marine products and textile sectors.
Announcing the move, Finance Minister Shri Chidambaram said, “In many ways, the appreciation of the rupee reflects the strength of our economy going forward. The rupee appreciation has a positive side to it in terms of lower production costs in sectors involving imported raw material and intermediates, lower oil import bill and lower cost of external debt servicing. Nevertheless, the sharp appreciation over the last several months has put pressure on the export sectors, particularly those with low import intensity such as leather, textiles, handicrafts and marine products. The government is sensitive to the pressures on these sectors, and is conscious of the need to offer support to export sectors to prevent job losses and to give time to these sectors to make a smooth adjustment to the changing economic scenario.”
The rupee appreciated 9.7% against the US$ between April 3 and November 20 this year and rose a staggering 15.1% year-on-year form October 2006 to October 2007.
