New Delhi: In an effort to cushion the loss from US president Donald Trump’s punitive tariffs, Indian exporters have said that they will lobby with the Reserve Bank of India (RBI) to allow them to temporarily convert proceeds from their US business at a rupee rate that’s 15% lower than current levels.

In an telephonic interview with Business Standard, Pankaj Chadha, chairman of the Engineering Export Promotion Council of India said that the exporters are asking for a rupee exchange rate of around 103 per dollar for US earnings.

At the moment, the rupee is currently trading close to Monday’s (September 8) record low of 88.33 to the dollar.

According to Chadha, the exporters will meet RBI Governor Sanjay Malhotra next week, and request him to lower the value of the currency, as they are facing a loss of around 30% in US-bound shipments because of the higher tariffs and as a result want the government to shoulder at least half of the burden.

The RBI didn’t respond to an email of the newspaper seeking further information.

Trump has imposed 50% tariffs on Indian goods shipped to the US, the highest tariffs in Asia.

As a result, Indian goods have become uncompetitive compared to manufacturing rivals such as Vietnam and Bangladesh.

With the US being India’s biggest export market, the tariffs are expected to badly hit labour-intensive industries like textiles and jewellery.

Some experts say that the RBI is already allowing the rupee to drift lower to offset the damage. The currency has weakened 2.8 per cent against the dollar this year, making it Asia’s worst performer, said the Business Standard report.

“The pace of INR depreciation has picked up post the 50 per cent tariffs on India. Depreciation of INR is the only policy tool in the near-term to reduce the negative impact on exports,” said Gaura Sen Gupta, chief economist at IDFC First Bank.

Chadha said the special currency rate would be an interim measure for shipments already booked by US buyers “to take care of existing orders that have to be shipped at 50 per cent tariff.”

However, a weaker rupee rate for exporters would be risky for the RBI as it could damage broader sentiment toward the currency, which, in turn, could result in forcing the central bank to step up its intervention in the foreign exchange market, a move that could cause a rapid erosion of India’s reserves.

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