Comparing to last year, Rupee appreciated by 11% (i.e Average dollar rate was 51.21 for the March 2009 and the average dollar value for Mar 2010 was 45.48). Compared to last quarter, rupee appreciated by 4% against the US dollar. Rupee appreciation weakens the revenues for the Indian export companies as the dollar value of the country’s exports rises. This situation is tricky, if the Indian exporter do business with Burma or Nepal, no need of thinking about price as they deal with same currency or they can dictate to be paid in Indian Rupees. But when they do business with United States then they may earn profit or loss due to rupee depreciation or appreciation as per exchange rate.

Imagine the negative impact on raw material exporters and low margin export goods especially in case the payments are received after 90 days. China has a fixed exchange rate vis-a-vis its currency. Just imagine the anxieties of the Indian exporters compared to the peace of Chinese exporters. In this scenario how will Indian exporters operate? work hard and make a loss! They deal with anxiety for weeks together trying to figure out what will be the final amount they will collect.

Federation of Indian Export Organization (FIEO) has asked the government to introduce fixed currency exchange rate policy to enhance the competitiveness of the Indian exporters due to rupee appreciation. FIEO is the apex body for the exporters.

Below graph shows you performance of the Dollar against Indian rupee (March 2008 to April 2010*)

*as on 14th April 2010