Exim Bank of India’s chairman and managing director, TC Venkat Subramanian has said that no export plan can be based on the recent currency fluctuations.

In an interview to the Times of India, Mr Subramanian said, that the appreciating rupee has affected certain labour-intensive sectors like textiles, leather, handicrafts, and sports goods. Their profitability has also eroded. The impact is not all that negative in gems and jewellery.

"Engineering exports and POL (petroleum, oil and lubricants) exports have done well. While these sectors help push up growth figures, they do not help in creating jobs. In the textile segment many were modernising their units which was attracting a lot of investments. Such investments will be hit because of the rising rupee," he said.

"As for our business, the balance sheet is impacted because 50% of our disbursements are in foreign currencies, particularly US dollar, but that is negligible. But, while evaluating funding requirements from the affected sectors, the viability of projects have to be assessed more carefully and we may consider giving longer repayment terms as their cashflows are affected. However, this is a passing phase. The currencies of major competitors (except China) Thailand, Brazil and Philippines have appreciated more than ours."

When asked how Exim bank will help companies who are looking for global acquisitions, he said, "One of the benefits of a strong rupee is that overseas acquisition will be at cheaper prices. Today a number of mid-cap companies are here in a big way. We will be supporting the mid-cap companies who do not have easy access to funds. Last year we have supported 30 projects."

"Among others we have financed Jalgaon-based Jain Irrigation to acquire an irrigation company in Israel and Chennai-based Aban Offshore acquire a company in Norway. Our acquisition funding has almost doubled this year. From Rs 2,400 crore in FY07, we have already disbursed Rs 3,000 crore in the first seven months. The year might end with even higher numbers."

About new initiatives to push India’s exports, Mr Subramanian said," We are helping push exports from the hitherto untapped areas. We have already started tapping potential in rural India and help establish direct contact between the overseas buyers and potential exporters in handicrafts and horticulture sector. Now we are trying to help export locally developed rural technology to developing countries."

"The hilly areas of Uttaranchal have developed a watermill to generate power of up to 2 KWT. This technology is very relevant for the African countries. We have allocated certain funds to help improve this technology and make it export worthy. We have also developed an IT tool to help small firms to develop export business plans and also help banks assess viability of projects."

Mr. Rakesh Joshi

Joshi Enterprise

Manager, Joshi Enterprise
Dispur, India

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