When it rains, it pours cats and dogs. how true is this saying. A period where everything is working in India’s favor, good governance, good geo-politics, international accreditation, good monsoon, pro-industry bureaucracy, lower commodity prices, high on reforms, high on FOREX and along with that strength of the INR.
A couple of months back, USD was trading at ₹69 to a dollar, now it is ₹64, a near 10% appreciation. If INR appreciates, it is pain for exporters. IT companies have lost 10% of their margins just because of this appreciation. Analysts expect the USD to reach 60 soon, IT and Pharma will become a sure no, no for investors.
In spite of the USD losing value, our FOREX reserves have reached historic peak, we are about to touch the $400 Billion mark by September 2017. Again another good thing is that, the remittances from NRI’s have been on the high, both because of the top class investment climate in India and the uncertainties of holding USD. Along with this advantage, Crude Oil prices holding at $60 is a big advantage for India.
Above 60B$ saved per annum and crude will not see its previous high of 126$ again, it will only decline. All these savings are expected to be ploughed into the economy in various ways, one of the main emphasis would be infrastructure. Look forward to see a totally changed India in the next decade.