Falling Rupee A Mixed Bag For Industry, Software Companies Set To Gain

Falling value of the rupee against the US dollar is turning out to be a mixed bag for the industry with some sectors bearing the brunt while others, especially software exporters, are hoping for continued gains, according to PTI

The rupee, which has been depreciating against the greenback, is near the psychological barrier of 80 to a dollar and is likely to remain subdued with the Federal Reserve working overtime to contain inflation, which is at a historical high, in the US
The biggest impact of the rupee depreciation will be on imported goods or goods using imported components, and the most-sought after item in this category is a mobile phone, added the PTI report.

"Every percentage decline in rupee value impacts mobile phone supply chain by 0.6 per cent because of imports of components. The 5 per cent decline (in value of rupee) has an impact of 3 per cent on overall profitability, therefore, prices have to go up," said Pankaj Mohindroo, chairman, ICEA.

On the other hand, he added, "India's export ecosystem is benefiting."
"Imports would have gotten expensive to that extent but fortunately commodity prices have started easing," Mohindroo said.