One should be in import and export ...not just export...import when it is cheap and export when it is costly!!! Simple...why crying hoo..laaa laaa ..Stupid!
This report is showing the negative aspects of raising rupee. It should have depicted the long term benefits of raising rupee. Raising rupee value is very good for india in long term (though NOT for indian IT companies which tried their best to retain rupee as low as possible in value)..we should stop undervaluing our rupee and ourself..
RE:Raising rupee good for India
by on Jul 26, 2007 08:25 AM Permalink
Strengthening rupee never going to be good for india. Millions going to be jobless due to exports are not competitive and this going to creat so much social problems. Your local product cannot be sold due to import goods are cheap.even like imported tea,cofee or rice will be cheaper than india products. Again many local companys will close and creat lot of unemployment. What is that our government want to achive by making millians unemployed and starving. Strengthening rupee only going to benifit unproductive stock market players. out of $150billion export if you loose 12% it is $18billion equivalant local rupee.who can sustain this loss. The main reason they mention for rupee strenghthening is $9billon flow in stock market which makes local companies to loose $18billion equivalant rupee. Government should see that indian products are cheaper like china doing. Even now China getting more foroegn investment and their import/export balance is surplus.Thier currency did not appriate like indian rupee. i strongly beleive this is a gambling to shake the indian industry.
RE:Raising rupee good for India
by Sai Akkanapragada on Jul 27, 2007 09:09 AM Permalink | Hide message
Currency exchange rate depends on the following, 1. Investment flow - FDI and speculative - Capital account 2. Current account - exports and imports. The reason why India is getting lot of foreign investment both FDI and speculative is because MNCs are expecting a good return for all the USD they invest in India. When will this happen? When the consumers both retail and corporate have good disposable incomes and purchasing power. Does this require Indian rupee to be weak because most of the jobs created in the last 5 years were due to outsourcing which led to a huge Indian middle class with lot of disposable income. This leads us to believe that Indian rupee has to be weak but due to capital inflows Indian rupee is becoming stronger in the short term. This may lead to lower revenues for exporters in IT, ITES but costs are also lowered as price of oil,imported manufactured goods etc will be cheaper. Will this lead to the death of Indian mfg, if the immediate impact is only to revenue and not cost.Yes. 2. We also need to analyze what percentage of India's GDP is exports. If we don't export value added products, our exports will be directly impacted by currency fluctuation.We end up earning less for the precious resources we export if the Rupee appreciates.If the way India is going to earn money is going to be through labor, example IT and diamond cutting, it is in India's interest to prevent the rupee from appreciating. One way to do it is to artificially peg the curren
RE:Raising rupee good for India
by chigurupati venkateswarlu on Jul 26, 2007 07:53 AM Permalink
Can you tell me few positive aspects? And also just compare the negative aspects against positive aspects and let everybody know. If you cannot, just sut
RE:Raising rupee good for India
by shashidhar biradar on Jul 26, 2007 08:11 AM Permalink
1. It has easened the Loan that we have borrowed from the west i.e 130-150 $ billion we can pay some of the amount. 2. We can Purchase capital goods from USA or from west by giving less ruppes 3. Petroleum sector is major winner as they have to pay less rupees. 4. Petrol and diesel were cheap inflation will be within RBI Norms.
Lastly IT had party for last 10 years now if it doing not well then dont worry concentate on engg. sector
RE:kaaliya madrasi
by on Jul 26, 2007 08:05 AM Permalink
Younus, if you come to west either you become Kaaliya or terrorist. Have a nice life in India and don't break it's fragile structure
china has undervalued it's currency to steal away business from usa unfairly in the name of free trade and indians are also thinking same , they are saying "send all your jobs to us , we will do cheaply sir , like your slave" if america stops outsourcing then gurgaon , pune , bangalore , etc will shut overnight so keeping rupee low is very important!
I am sure the finance minister knows whats going on and the RBI too. There has to be a reason for not doing anything about the rupee strength. There is a misconception among people that India is getting better with rupee getting stronger and dollar getting weaker. But looks like its hurting Indian business in a negative way than positive. India GDP growth is expected to be at around 8 to 9% in spite of rupee's new value. Keeping rupee at a lower value brings more investment to India and more business also. Look at China, thats what they have been doing. Rise in rupee and fall in dollar helps American business's rather than Indian businesses. I was in Indian in June and I did very little shopping due to high prices. I spent all that money in US which was much cheaper. The clothes, electronics are way cheaper in US with good quality than here. A nice shirt in Bangalore costs Rs. 2000 = $50 and a better shirt in US costs only $25. So I am sure there must be a reason why the Finance Minister is mum about this issue, but I think something needs to be done.
RE:What's going on?
by Indian Muslim on Jul 26, 2007 07:07 AM Permalink
100% correct, I was in India few days back and bought a half sleeve shirt for 2400 Rupees which is close to 50-60$ at whatever rate you apply. I can get a much better "QUALITY" shirt in US at this price even though it might be made in China the quality will be excellent.
What about the billion of dollar worth loan which Indian firms are paying back at a much lower rate to US??
Those who are crying foul should also disclose the margin at which they made profit.
Hard to understand why a profitability drop is beign spoken about at %'age how about the overall import as well and cost of mandatory goods.
RE:What's going on?
by satheesh kumar on Jul 26, 2007 07:01 AM Permalink
Americans are living way beyond their means by having cheaper imports !!. Try to find euro market or improve marketing locally. A rising rupee is beneficial for india in the long term.
RE:What's going on?
by chigurupati venkateswarlu on Jul 26, 2007 07:58 AM Permalink
Can you tell us few positive aspects because of raising rupee? And also just compare the negative aspects against positive aspects and let everybody know. If you cannot, I hope you know what you should
RE:we need rupper to be devalued
by on Jul 26, 2007 10:07 PM Permalink
I will focus this discussion on the trade between India and USA. With a net trade surplus Indian currency is bound to appreciate assuming that inflation, interest rates and the central bank finagling does not devalue the currency further. At the same time, the Central Bank and corporate managements are well aware of the US dollar's continued weakness. This weakness will lead to a re-examination of the competitiveness of the exports India makes to the U.S.
In the US, the middle class incomes are taking a sound beating due to a lot of imports substituting the high cost of producing domestically and loss of related jobs and industries. The huge trade deficit with China and other countries has been increasing, add to this the domestic budget deficit and you have a huge debt to finance. In the US we also have the problem of footing a huge oil import bill. Some dollar devaluation is natural and is likely to restore some of the lost competitiveness.
For countries like India, we need to work on the quality of the goods and services that we produce in order to create a sustainable competitive advantage versus other countries like China(which refuses to devalue its currency and faces stronger currency controls). At the same time, my understanding is that multinational companies are selling goods in India for much higher margins compared to here in the USA. So the Indian consumer does take a beating for this and this needs a close watch over inflation, which we know the Central ban
RE:RE:we need rupper to be devalued
by on Jul 26, 2007 10:09 PM Permalink
which we know the Central bank is already doing right now.
With a high inflation rate and an appreciating currency, some of the 'commodity' exports are definitely placed precariously and it is up to the government to step in to protect these industries or up to these industries to improve the quality of the goods and services they produce. It will be interesting to see where these commodity exports ends up.
I expect that the Indian central bank will maintain the current exchange rate of dollar to rupee. The central bank will not want to interfere anymore than it already is in order to maintain the market's confidence in the Rupee. In the long run it is the price and quality competitiveness of Indian goods and services that will matter.
