The Rupee Dilemma: Exporters Struggle Amid Currency Depreciation

The depreciation of the rupee against the US dollar is offering limited advantages to Indian exporters, primarily due to the high import content and global market uncertainties. As import costs surge with a weaker rupee, exporters face challenges in leveraging the currency's decline for increased competitiveness.

The continuing depreciation of the Indian rupee against the US dollar has posed significant challenges for domestic exporters, as observed by sector experts. Although a weakening rupee typically enhances export competitiveness by lowering the international prices of Indian goods, the prevailing circumstances have restricted these potential benefits.

Heavy reliance on imported raw materials has substantially elevated costs, nullifying the gains typically associated with a weaker currency, remarked international trade expert Biswajit Dhar. Despite the rupee's decline by over 4% since January last year, exporters are struggling to profitably exploit this downturn in currency value.

Additional challenges arise from increasing expenses in shipping, insurance, and marketing—all denominated in US dollars—which exacerbate the situation. Experts also noted similar depreciation trends in currencies of other countries such as China and Japan, highlighting the competitiveness challenges faced by Indian exporters amid global currency fluctuations.

(With inputs from agencies.)