Many people ask: If a weaker #currency helps a country's exports, then why a sliding rupee is not helping India's exports? Well, the weaker #Rupee is certainly helping India's #services #exports & bringing in more inward #remittances.
#RupeeVsDollar #INR x.com
#RupeeVsDollar #INR x.com
There are multiple reasons why it's not helping goods exports:
1. If we keep #steel artificially expensive by erecting import barriers, it will discourage #exports of all value-added steel-intensive products produced by downstream #industries. #manufacturing
1. If we keep #steel artificially expensive by erecting import barriers, it will discourage #exports of all value-added steel-intensive products produced by downstream #industries. #manufacturing
2. If we keep #textile #fibres expensive to help #RawMaterial processors, it will discourage the #export of downstream products e.g. yarn, #fabrics, and #apparels. #InvertedDuties are killing #production and export of value added products @Psm_cuts
3. A combination of high #ImportDuties and #PLI is encouraging superficial manufacturing and #ImportIntensive manufacturing and exports, e.g. #electronics #MobilePhones #Apple . The result: exports lead to more imports.
4. High import barriers - aimed to encourage indigenous #Manufacturing - actually increase the relative attractiveness of domestic markets and end up discouraging exports especially when #exports (dominated by undifferentiated commodities) have lower margins than domestic sales.
In contrast, a weaker INR incentivises exports while simultaneously protecting Indian manufacturers from subsidised/dumped #imports.That's why it makes sensefor #RBI to stop defending #Rupee and let it slide gradually & steadily @Psm_cuts
#RupeeVsDollar
asia.nikkei.com
#RupeeVsDollar
asia.nikkei.com
For more details on how domestic sales subsidise exports, please refer to the following:
moneycontrol.com
moneycontrol.com
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