Is link exchange harms search engine ranking ?
Most of the time, yes it does.
People simply do not fully understand the process of selecting sites to exchange links with according to Page Rank Value (and how this may or may not demonstrate superior relevance), type of link, number of links and how to determine the correct number, or link placement altogether.
Quite frankly, unless you have a very, very clear understanding of SEO methods and are particularly aware of how your website stands with regard to all the criteria of worthiness by the Search Engines and within your industry/Category, I would refrain from attempting to implement a poorly construed strategy based upon common methods gleaned online, no matter how "prestigious" the source may be.
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