Dollar strength against rupee no panacea for export growth: EEPC India
Kolkata, Sep 3 : India's engineering export growth slackened to 9.4 per cent in July even as the rupee continued to depreciate against the dollar during the month, demonstrating that a stronger dollar does not always lead to export momentum, the EEPC India said on Monday.
The Engineering Export Promotion Council (EEPC) of India said engineering exports had grown by 18.92 per cent in April this year, 14.59 per cent in May, 14.17 per cent in June and then by 9.37 per cent in July.
"Our view has been that it is a stable currency which helps exporters, providing them with predictability of dealing with the buyers. Any fluctuation and volatility on either side does not help," council's Chairman Ravi Sehgal said.
The EEPC paper noted the rupee depreciated by 6.56 per cent in July as compared to 5.19 per cent in June.
"But did exports grow at a higher rate too, and was there a currency depreciation advantage? No, exports in July, this year expanded at a lesser pace of 9.37 per cent than 14.17 per cent in June," it explained.
In any case, the rupee depreciation to plus 71 to a dollar level in August should be seen in the context of January 2017, when the average exchange rate was Rs 68.08 to a dollar which reversed to 63.64 in January this year, it said in a statement.
When the rupee was 68-plus to a dollar in January 2017, engineering exports grew by about 12 per cent but when in the same month of 2018, when the rupee became stronger and exporters could have got the disadvantage of a weak dollar, these exports grew at a higher pace of 15 per cent, the council said. It noted that a stable currency is the best bet for exporters.
According to EEPC India, the present depreciation of the rupee should get a contextual perspective that it is not the Indian currency alone which has lost ground. Currencies of major emerging markets have seen value erosion against the US dollar, giving level-playing to exporters of all these countries.
"When everyone else is on the same footing, extra advantage does not really accrue. The key lies in improving the domestic efficiency levels so that the cost of production is brought down. The dollar appreciation conversely is also making the raw material for exports expensive," it added.
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India announces plans to amend nuclear liability laws ahead of Modi's expected visit to US
New Delhi, Feb 1 (PTI): India on Saturday announced plans to amend its nuclear liability law and set up a nuclear energy mission, a move that came ahead of Prime Minister Narendra Modi's likely visit to the US.
New Delhi made public its decision to amend the nuclear liability law little over two weeks after Washington lifted restrictions on three Indian nuclear entities to open up new avenues for India-US collaboration in the civil-nuclear field.
Certain clauses in India's Civil Liability for Nuclear Damage Act, 2010 have emerged as hurdles in moving forward in implementation of the historic civil nuclear deal that was firmed up between the two strategic partners around 16 years ago.
Modi is expected to visit Washington this month to hold wide-ranging talks with US President Donald Trump with a focus on further shore up bilateral cooperation in a range of areas including trade, energy and defence.
India's decision to set up a 'Nuclear Energy Mission' with an outlay of Rs 20,000 crore and plans to amend the nuclear liability laws were announced by Finance Minister Nirmala Sitharaman while presenting the Union budget for 2025-26 in Parliament.
"Development of at least 100 GW (Gigawatt) of nuclear energy by 2047 is essential for our energy transition efforts," she said.
"For an active partnership with the private sector towards this goal, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be taken up," she added.
The Atomic Energy Act of 1962 prohibits investments by the private sector in nuclear power plants. The proposed amendment is expected to remove this provision.
The finance minister said a 'Nuclear Energy Mission' for research and development of Small Modular Reactors (SMR) with an outlay of Rs 20,000 crore will be set up.
"At least five indigenously developed SMRs will be operationalised by 2033," she said.
Modi described the decision to promote the private sector in the nuclear energy sector as "historic".
"This will ensure a major contribution of civil nuclear energy in the development of the country in the coming times," he said in his reaction to the Union budget.
Modi said that civil nuclear energy will ensure a significant contribution to the country's development in the future.
The US last month removed restrictions on Bhabha Atomic Research Centre (BARC), Indira Gandhi Atomic Research Centre (IGCAR) and the Indian Rare Earths (IRE).
The decision came after then NSA Jake Sullivan announced that Washington was finalising steps to "remove" hurdles for civil nuclear partnership between Indian and American firms.
India and the US unveiled an ambitious plan to co-operate in civil nuclear energy in July 2005 following then Prime Minister Manmohan Singh's meeting with American President George W Bush.
The historic civil nuclear agreement was finally sealed around three years later following a series of negotiations.
It was expected to pave the way for allowing the US to share civilian nuclear technology with India.
However, the planned cooperation did not move forward for a variety of reasons including the strict liability laws in India.
US nuclear reactor makers such as General Electric and Westinghouse had shown keen interest in setting up nuclear reactors in India.
In the last few years, India has been in talks with a number of countries including the US and France on cooperation in the small modular reactors (SMRs).
India may pitch for cooperation in the SMR sector with the Trump administration.
US-based Holtec International is known to be one of the leading exporters of SMRs globally and the Department of Atomic Energy is learnt to be interested in having some collaboration with the American firm.
