The misery will surely be felt by the 2 to 5 crore people who the Commerce Ministry expects will lose jobs by March 2008. ‘‘We have got letters from a large number of people about shutdowns and job losses. We had asked departments concerned to seek field reports,’’ a senior Ministry official said.

‘‘This is a crisis situation. Exporters never anticipated this. We have to prepare ourselves for it,’’ said A. Sakthivel, President of TEA, which has 600 members. Like him, all exporters are hunkering down for a tough time, devising means to staunch the bleeding.

Saktivel’s Poppys Knit Wear, a Rs 190-crore company that mostly exports its product, is now trying to reduce production cost and minimise the use of raw materials. ‘‘We are also trying to increase production by using skilled engineers and by using computer-aided designs,’’ said Sakthivel. Companies are now hectically negotiating with raw material suppliers and processing units to bring down the costs and make up the profit margins somewhat.

‘‘Industry has to improve its productivity and bring down costs, but the rupee’s appreciation has happened so fast that there’s been little time for adjustment. Contracts can’t be renegotiated overnight, neither can prices be increased unless you have big bargaining power,’’ the Commerce Ministry official pointed out.

The implications of the dollar fall are serious. ‘‘The biggest casualty has been capacity expansion,” said Rajeev Gupta, director of Ludhiana-based Venus Garments. Gupta’s group, owner of brands like Duke and Neva, exports garments worth Rs 180 crore, primarily to the US. “Companies that have a strong domestic presence can still cope with the losses. But the worst hit are standalone garment units executing bulk orders to buyers based in different parts of the world. When I say that capacity expansion has taken a hit, it means that a lot of jobs that could have been created have been lost.”

... contd.