New Delhi, Aug. 26: India Inc is worried about industrial growth because of the rising rupee and hikes in interest rates.

Despite a good monsoon this year, the other two key drivers of the economy — exports and investments — are showing signs of moderation, the Federation of Indian Chamber of Commerce and Industry (Ficci) said in its business confidence survey for April-June.

The chamber said an assessment of industry and firm-level performance showed that companies were in the midst of a ‘moderate slowdown’.

Arun Bharat Ram, managing director of SRF Limited, said, “Exports have been affected in sectors such as textile and leather. Companies will have to adjust to a stronger rupee, but that takes time.”

“However, with inflation coming under reasonable control, interest rates will come down and companies will pick up on investments. The encouraging factor is that the RBI too has said the worst is over as far as inflation is concerned,” Ram added.

Ravinder Zutshi, deputy managing director of Samsung India Electronics, said, “High interest rates did not have any impact on the consumer durable sector. Real consumer buying has not been affected.”

About 58 per cent of respondents to the Ficci survey said the industry performance was “moderately to substantially” better against the last six months. The figure for the last survey was 68 per cent.

On the performance at the firm level, 64 per cent of companies reported that their performance was “moderately to substantially” better against the last six months, compared with 73 per cent in the last survey.

On expectations for next six months, the survey revealed that the respondents’ outlook for the economy had improved compared with the last survey. The expectation index marginally improved to 70.1 from 68.2 in the last survey.

Demand conditions in the economy were, however, weakening. Nearly 30 per cent of the companies reported “weak demand” as a constraining factor. The survey said certain segments of industry were forced to cut down on production because of weak demand.

In the current survey, 60 per cent of the companies reported a capacity utilisation of more than 75 per cent against 72 per cent in the previous study.