The Indian rupee was trading at ₹79.67 against the US dollar in early trade on Monday.
The Indian rupee was trading at ₹79.67 against the US dollar in early trade on Monday.
Commerce and Industry Minister Piyush Goyal has said that the Indian rupee has shown greater resilience than most other currencies in recent years and the compound average growth rate of depreciation is lower than it was before 2014.
He also said that exporters should not depend on the depreciating rupee and should stand on their own based on the quality of the products and their ability to meet the needs of the customers in the global markets.
“I don’t think there is any comfortable or uncomfortable level for the rupee. The rupee finds its place. It is a function of several natural factors – inflation in each country, a function of capital flows and the risk-reward ratio. I am happy that Indian Rupee has shown greater resilience than most currencies in recent years,” Mr Goyal said while interacting with the media.
Asked what could be the comfortable level of rupee where it does not hurt imports, and makes exports competitive, the minister said: “If you only look at the Indian rupee before 2014, and if you have seen the CAGR have taken. [Compounded Annual Growth Rate] Of the depreciation of the rupee, it was in the range of around 3.25-3.5%. Presently, Indian Rupee is devaluing at around 2.5% CAGR, hence the strength of Indian Rupee has improved significantly.”
The Indian rupee was trading at Rs 79.67 against the US dollar in early trade on Monday.
Asked about the EU’s plan to withdraw export benefits under the Generalized Tariff Preference Scheme (GSP), Mr Goyal expressed confidence that Indian exporters would be able to supply significantly based on their strength.
India’s exports from sectors such as plastics, stone, machinery and mechanical equipment valued at around $8 billion by the EU will not be eligible for low or zero duty concessions from January 2023 after the EU withdraws GSP benefits.
“We’re negotiating a free trade agreement with them [EU], We will focus on that conversation. I don’t think GSP is necessary in any case to increase business engagement. It is better to do FTA with EU. without GSP [with the U.S.]Our exports have not suffered,” he said.
On further expansion of trade with the US, the Commerce Minister said that given the size and scale of the US market, every region in the US is an opportunity for Indian businesses.
The US is a big player in international trade, given the fact that they are looking to expand on technology in a big way, he said, “the sky’s the limit”.
“We have the potential to grow our trade in the US from the current $159 billion to at least $500 billion over the next six to eight years,” he said.
Responding further on how Free Trade Agreements (FTAs) will help India to reduce the growing trade deficit, Shri Goyal said that each agreement will help India to increase trade with all its partner countries.
“Of course, exports will increase, and there may be some increase in imports. Ultimately, economic activity grows both ways. So, I’m looking at international trade as a whole, taking a big jump. But for exports We are very confident that by 2030, India will aspire to export goods worth $1 trillion and export services worth $1 trillion.”