NEW DELHI, Aug 25: One of the biggest factors retarding export growth, according to HSBC analysts, is the fact that the rupee continues to be overvalued. In the last one year, for example, the rupee has appreciated in real terms by 6 per cent - that is, if you take into account the fact that most other currencies have depreciated against the dollar.

The yen fell against the dollar by 7.4 per cent, deutsche mark by 18.2 per cent, the Swiss franc by 18.1 per cent, the French franc by 18 per cent.

Currencies of countries that compete with India in terms of traditional exports such as textiles also fell by sharply -- Pakistan's rupee fell by 13.4 per cent, the Sri Lankan rupee fell by 6.1 per cent and the taka fell by 5.3 per cent. All along, the rupee held rock steady (not considering the fall over the last few days).

Since India's exports are low-value, low-segment products, their pricing is crucial. The rupee's appreciation in real terms has obviously hit competitiveness badly. In historical terms, exports have grown significantly in periods.

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