The weak rupee may not really benefit Indian apparel exporters since the duty drawback rates are lower than expected. Overseas buyers are not passing on the benefit to exporters. The Indian rupee has hit an all-time low against the US dollar after having fallen more than 12 per cent this year.

The industry wants at least a 7.5 per cent rate of duty drawback. Exporters were expected to benefit from a weak rupee as they get more rupees while converting their dollar export earnings into Indian currency. The weak rupee was expected to give a cushion to apparel exporters who were heavily burdened by the sharp rise in the cost of imported raw materials. Especially for auto component players, the going has been good, with marquee vendors expressing happiness on the back of the shining dollar bringing cheer to exporters.

Businesses that are transacted in dollars (the IT, apparel, leather or textile sectors) would have made a substantial gain of seven to eight per cent. Those raising funds from the Indian market can rest assured as investments typically pour in with a one-year timeline. The current slide augurs well for those intending to raise money from the domestic market. However, the sentiment is that having a stable currency should be the way forward.