A STUDY ON FOREIGN EXCHANGE RISK EXPOSURE OF SMES IN TAMIL NADU

Once sporadically meeting demands of the national market, today, Indian SMEs have become dominant players in the country's business landscape. For many SMEs in the country, operating overseas has become a norm since the wave of globalization kicked in during the latter part of twentieth century. However, the SME sector is still experiencing a rapid growth phase and has only begun unveiling its true potential. Since currency fluctuations have an adverse impact on business profits, this is high time for Indian Small and Medium Enterprises (SMEs) to concentrate more on Foreign Exchange. Forex exchange should certainly be a part of the business and revenue generation strategies for a longer run. It is time for SME sector to witness more and more innovative foreign exchange products and services to propel the growth of the Indian businesses on global platform. The present study examines the forex risk exposure by a structured questionnaire which was used to collect the desired information. A final data set of 50 respondents was used for examining the forex risk exposure by exporters listed in their respective Associations in India.