Exporters to bear the brunt but easing Re to bring some relief

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New Delhi , June 4: as other seafood plants as they use lot of diesel for their operations and also for running generators. “Most of these plants do not get power from the grid,” he added.

Chacko said exporters in most sectors rely on standby arrangement of power using their own generators, and the increase in fuel price will add to their costs. He said exporters with operations and production facilities in the interiors would also be impacted due to increase in transportation costs. Though the government has announced across-the-board 5% reduction in custom duties on crude and petroleum products, since the exporters get duty drawback benefits on imports, this would not give them any benefit, Chacko said.

Arvind Mahajan, Executive Director, KPMG, said “The impact of fuel price hike will not be significant on exports as the transportation element is not a major portion of the total costs. In fact, the decline of the rupee value against the dollar could offset the losses due to increased transportation and raw material costs.”