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Strong Rupee and Indian Auto Sector

The strong Indian Rupee is no cause for concern to majority of the Indian auto industry is what one can usually gathers from media sources.

 

India exports over $500 million of automobile components of the total sector worth $2 billion to mainly US companies, according to Automotive Component Manufacturers’ Association of India.

 

However, it is understood that exporters are reworking their contracts incorporating the Rupee appreciation on their terms to tide over the erosion in profits.

 

The Dollar exchange rate stood near about Rs 45 during November 2006, whereas it was Rs 39.23 yesterday.

 

Industry insiders fearing volatility in the exchange rates, have scurried for amending contract clauses with their principals to safeguard their margins from shrinking drastically.

 

For those exporters affected due to rupee appreciation, turning away from Dollar to a far stable Euro, is just a logical option.

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Posted by Ashish Phanse on 17 November, 2007 3:12:00 PM IST #


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