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June 15, 2007 19:25 IST
Finance Minister P Chidambaram is expected to extend a relief package for leather and textile exporters, who are hit by the rupee appreciation, as demanded by the commerce ministry.
"Textile and leather sectors have met me... We will find means and ways in which we can extend them a helping hand," Chidambaram said in an interview to CNBC TV18 channel.
Textile and leather sectors are big employers and have been hardest hit by the appreciation of the rupee as they operate on thin margins.
Commerce ministry had recommended to the finance ministry on Wednesday to increase rates at which duties are refunded to exporters and bring down the interest on their working capital loans.
However, while offering relief, Chidambaram said in the medium to long run the exporters would have to become more efficient and more competitive to face the challenges of changing scenario.
"Competitiveness in the international market not only depended on exchange rate but also on economies of scale, quality of products, design and other factors," he said.
Chidambaram said exporters have informed him that had the rupee appreciated over an extended period of 18 months as against 4-5 months they could have adjusted.
He said, while he sympathised with exporters, they must also pay attention to other factors.
The minister dismissed the idea of putting any quantitative restrictions on foreign direct investment to restrict foreign currency inflows that were putting upward pressures on the rupee.
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