Hyderabad: Rupee breaching the 74 mark against the dollar is evoking mixed reactions from the and industry. Expenses paid in dollar will pinch the pockets while those that have receivables in the greenback will benefit.
According to Vijay Mohan Raj, global tourism body SKAL International Director, the rupee falling against the dollar is bad news for those who want to travel to offshore destinations.
“There are many services that are allied with travel and tourism. Most of them charge in dollars- so the cash outgo for conversion from Indian rupees is high. This will impact the travel plans of several people. There is a possibility that some will also postpone their travel plans,” said Raj, who is also the Managing Director of city-based Sameera Travels and Tours.
Those flying to India and spending in India will find the falling rupee beneficial. “But looking at the things that have unfolded in the past weeks, it will take some time for the travel momentum to come back,” he said.
Likewise, the companies that are into exports will benefit as each dollar fetches more rupees. Hyderabad has significant IT and Pharma exports. “Rupee falling against the dollar is attractive for the pharma export segment. However, the recent disruption in supplychain of raw materials and active pharmaceutical ingredients due to coronavirus has resulted in companies looking for alternatives. This has increased the import costs, which is also billed in dollars. This will take away some of the benefits,” said Jayant Tagore, former president of Bulk Drugs Manufacturing Association.
The industry would benefit when exports rise and at the same time imports fall, he said.
In the healthcare sector, the falling rupee will also lower the costs for those traveling to India for medical procedures. “Flow of international patients into India and Hyderabad is growing in double digits and foreign exchange fluctuation can have a positive impact on the health sector,” said Dr Hari Prasad, President, Apollo Group Hospitals.
The falling rupee also impacts the MSME sector. “The MSME sector mostly uses indigenous technology and is able to compete in the international market in the unequal playground. The falling dollar or a strong rupee will have a negative impact by way of realization in rupee terms. As it is the MSME sector is reeling under the cash liquidity crunch. The fall in dollar exchange value will further tighten the situation. While the fall of the dollar will be a boost to the total economy, it may turn to be a bane to the MSME sector,|” said Koteswara Rao, Convenor, All India Forum for Small and Medium Industries.