The falling value of rupee vis-à-vis a strong dollar has dampened the spirit of shipping firms as well as the importers who fear of a cascading effect on multiple sectors.
Though there are reports that steps taken by the Centre would arrest the further slide of the rupee, many feel that there would be no respite at least for sometime with the dollar gaining strength further.
The prevailing depreciation of rupee has become an issue of serious concern for the importers whereas some of the exporters say it would benefit them. However, market observers say only 20% of exporters, especially those engaged in software marketing would reap the benefits for resorting to ‘hedging practice’.
With the uncertainty continuing, exporters also do not know on the price fixation and a majority of overseas buyers are seeking review of prices, says A.P. Chambers of Commerce and Industry Federation president G. Sambasiva Rao.
Most of the ports, including the ones in Visakhapatnam and at Gangavaram, source their revenue from import of commodities such as coal. The Visakhapatnam port imports crude oil for processing at the HPCL-Visakh Refinery and storage at crude cavern owned by Indian Strategic Petroleum Reserves Limited.
Mr. Rao, Managing Director of Sravan Shipping Services, says the shipping fraternity are facing an uncertain future due to falling value of the rupee. “The rise in oil import bill is bound to result in price rise and hit all sections of the society,” he says and advocates for steps to be undertaken to improve the value of rupee.
Visakhapatnam Stevedores’ Association president Krishna Kumar says that the foreign companies always insist on renegotiation of prices in most cases when rupee depreciates whenever they have placed orders for export of seafood and other material from India.
The rise in value of U.S. dollar has brought cheers among IT exporters in the city. Most of the IT companies receive orders from Oracle, Google, Microsoft and other multinationals after a stiff competition.
“The advantage of dollar becoming strong will help us. It will certainly fetch us more when we convert it into rupee. However, in the long run, it will not benefit as they will opt for fresh bids,” Rushikonda IT Park Association vice-president O. Naresh Kuamr observes.
Same is the situation for business process management companies who work in the areas of healthcare, insurance and banking. Almost 80% of IT and IT enabled services in Visakhapatnam region are involved in BPM activity with HSBC, Concentrix, Patra India, WNS and Conduent considered as major players. The total turnover from IT and ITES is estimated at around 2,000 crore.