|
|
SME plastic exporters seek govt. support for revival
|
|
|
|
| Top Stories |
 |
|
|
|
Saurabh Gupta | 29 May, 2010
Indian plastic exporters are seeking government support as the sector, which comprises largely small and medium enterprises (SMEs), has been facing numerous challenges including the Eurozone crisis, volatility of rupee, poor infrastructure and lengthy documentation process at lower levels.
This was stated by the Chairman of the Plastics Export Promotion Council, Manoj Agarwal, during a press conference in New Delhi on Thursday.
He said, "The plastic industry is passing through a worst phase of challenges. The Eurozone crisis and volatility of Rupee are the present crisis while infrastructure and lengthy documentations at lower level are the long-term challenges that the sector is facing constantly."
The Indian plastic industry is highly fragmented with an estimate of around 25,000 firms and employing over 3.5 million people. Over 85 percent of the industry comprises of small and medium enterprises (SMEs), with the SSI sector dominating at over 75 percent. The industry has over 2200 exporters.
Due to the ongoing euro-zone crisis and appreciating rupee the council urges the government to intervene and check the volatility in rupee.
Plastic exports fell by nearly 9 percent in between April 2009 and February 2010 compared with the same period last year.
Agarwal told SME Times, "Major trading partners for the Indian plastic sector comprise of the European Union (EU) and the United States of America (USA) accounting for over 30 percent of its export. Both these markets have exhibited a negative growth in imports from India for the period April 09 - February 10."
"To add fuel to the fire, the Eurozone crisis due to the Greece problem is showing signs of spreading to other parts of Europe. The plastic sector, which largely caters to the EU with about 20 percent share in Indian plastic exports, is apprehensive of its exports being further hit adversely," he added.
India's share in global plastic exports is less than 1 percent. Exports of plastic have declined by almost 9 percent during April - February 2010, at about USD 2.80 billion. Plastic raw material exports still continues to dominate plastic exports constituting over 30 percent of the total exports, which earlier exceeded 50 percent.
While commenting on the issue of appreciating rupee, he said, "The Indian exporters in the plastic sector is at a distinct disadvantage compared to the fierce Chinese competitors who operate in a controlled forex regime, thereby getting much higher yields on the foreign currencies. This factor places the Indian exporters at distinct disadvantage in an appreciating rupee scenario, which we have been constantly witnessing for the last few months."
"While our government has rightly provided additional options for forex risk management in terms of over-the-counter hedging tools, the exporters in the small and medium sector that dominate the plastic industry are not geared up for forex hedging."
"It is, therefore absolute necessary for the government intervention to peg the dollar at Rs. 47.50 to Rs. 48.00 levels," he added.
He also said that the government should look into the issues of lengthy documentation at lower level and on the issue of development of infrastructure including transport and electricity, which was eating their profit margins.
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Customs Exchange Rates |
| Currency |
Import |
Export |
US Dollar
|
84.35
|
82.60 |
UK Pound
|
106.35
|
102.90 |
Euro
|
92.50
|
89.35 |
| Japanese
Yen |
55.05 |
53.40 |
| As on 12 Oct, 2024 |
|
|
| Daily Poll |
 |
 |
| Will the new MSME credit assessment model simplify financing? |
|
|
|
|
|
| Commented Stories |
|
|
|
|
|
|
| |
|
