Indian exporters to lose interest subsidy

NEW DELHI, Aug. 21 (UPI) -- Indian exporters may soon lose a government interest subsidy to offset the rupee's appreciation as the currency is in a decline.

The Indian Finance Ministry has ruled out extending the exporters' 4 percent subsidy after next month, the Press Trust of India reported.

An industry official told the news agency Finance Minister P. Chidambaram had informed a textile and apparel exporters' delegation about ending the subsidy announced last year.

"Since currency depreciation has again improved exporters' margins, there is no case for such a sop," the official said.

The government also declined the delegation's request of refund of levies such as market fee imposed at state level on constitutional grounds.

The Indian textile industry says it is facing tough competition from Vietnam and Bangladesh due to higher input costs.

India's inflation currently is running at more than 12 percent. The rupee has sunk to a 17-month low against the U.S. dollar -- about 39 to the dollar -- as more foreign investors pull out from Indian markets.