On the one hand, we have reports about how textile companies are reeling under the effect of a strong rupee even as they cut jobs. The reason: a strong rupee that prices their stuff out of the global market. And on the other hand, we have the latest trade data that says India’s exports rose 19.2% in dollar terms in September. Textile exports, too, did well.
It’s not clear what’s really happening. One possibility is that the September trade data has been a victim of some sort of statistical quirk. The other possibility is that Indian companies have begun to adjust to the realities of a strong rupee, perhaps by diversifying their markets and improving productivity on the shop floor.
That does not mean that exporters are having an easy time. Exports in rupee terms have increased only modestly, by 4.31%. This means exporters have not been able to hike prices to protect their margins.