Goldman Sachs downgrades India, says rupee can hit 65 to dollar

[East Asia United]

No worries, India will quintuple GDP twice by 2030 to have the largest economy in the world (actually if India has a GDP 18x larger in 2030 it wouldn't even be close to the 2nd largest economy, let alone the 3rd but you get my point).

Isn't this what we have been told since 2006?

 

[faithfulguy]

Currency devaluation is only for India not for other countries, which indicates it is intentional by GOI.

You need to stop making excuses for India. Instead find solutions to help India grow.

 

[Infinity]

Currency devaluation is only for India not for other countries, which indicates it is intentional by GOI.

I too feel the Same..............This will less the imports and boost the domestic manufacturing Units...............

 

[Okemos]

I too feel the Same..............This will less the imports and boost the domestic manufacturing Units...............

I don't know much about Indian economy, but isn't India running trade deficit? If you import more than export, then shouldn't currency depreciation only enlarge trade deficit. Material costs will also go up so I don't under how cheap currency can help India under current circumstances. unless India's material, energy etc are all self reliant. Cheap currency is good for net export countries, but India is not a net export country.

 

[Pulsar]

So why is the Indian government so desperate to stop the fall of the Rupee?

The GOI is all at sea! Captain Manmohan has lost his GPS, sextant and magnetic compass. No idea where he's heading!

The Indian economy is another Titanic in the making!

 

[Infinity]

I don't know much about Indian economy, but isn't India running trade deficit? If you import more than export, then shouldn't currency depreciation only enlarge trade deficit. Material costs will also go up so I don't under how cheap currency can help India under current circumstances. unless India's material, energy etc are all self reliant. Cheap currency is good for net export countries, but India is not a net export country.

You are right........In short run it will affect............I am from Chemical Industry............Lot of Chemical Manufacturing Units are shut due to Cheaper Imports....... if Imports are costlier then that will force the Vendors to Procure Material Locally...........

 

[TopCat]

The problem that India faces is the same as other developing countries including China. As growth slows there is capital outflows as the hot money is going elsewhere looking for higher returns. Most likely the money is going into commodity speculation. As the economy slows and the demand wanes prices of commodities are still going up. The capital outflows is what causing the currencies of developing countries to fall in value. China is better able to weather this because of its immens forex reserves of 3,5 trillion dollars. India a country with a consistent current account deficit is much more vulnerable. Another factor is that the US is said to begin tapering the QE programs leading to higher interest rates in the US. This has also played a role in the capital outflows from developing countries as well. But i believe that in the short run there maybe some intermission from the fall as investors understand that the US tapering talk is just that talk and nothing will happen.

The fundamental flaw of Indian economy is that they covers the CAD with hot fund. The good old days of call center growth is gone, and I dont see any immediate industry to spring up to alter the foundation economy of India.

You are right........In short run it will affect............I am from Chemical Industry............Lot of Chemical Manufacturing Units are shut due to Cheaper Imports....... if Imports are costlier then that will force the Vendors to Procure Material Locally...........

dont you think you should find out why Indian produce are expensive and address that instead of making import expensive.

 

[Hellraiser007]

No worries, India will quintuple GDP twice by 2030 to have the largest economy in the world (actually if India has a GDP 18x larger in 2030 it wouldn't even be close to the 2nd largest economy, let alone the 3rd but you get my point).

Isn't this what we have been told since 2006?

Yes India definitely will, it just got doubled its GDP from 1 Trillion to 2 Trillion in a span of 5 years and is about to grow more than last year.
Some people take pride on other countries achievements and ignore their own ......

but the other argument is that FDI not coming and hence local currency is loosing value vis-a-vis dollar, as dollar becomes scarce

GOI is increasing the FDI cap from 21% to 49%. In the long term this devaluation will benefit India. India wants to take advantage of its human resources.

Sorry, the Chinese Yuan has actually been increasing in value constantly over the past decade.

There is a lot of demand for Chinese exports, which means there is a lot of demand for the Chinese Yuan.

China's advantage is producing goods cheaply, the moment some other country produces cheaper than china you people will loose that advantage. This scenario will happen this decade.

 

[Kolaps]

You guys can afford a slow down (literally).......We on the other hand will end up nowhere with the slowing economy.

Everybody knows about Malaysia's middle income trap....don't want India to slip into a low income trap.

Malaysia is actually very ready to became high income country. There's several factors that people don't want to talk about it, the reason why Malaysia trapped in middle income situation.

1. Malaysia have world most ethnic discrimination policy. Some Malaysia ethnic group is actually ready to lift Malaysia economy up to the next level. But the discrimination makes this high educated people to leave the country and created a massive brain drain, the world worst too. Actually, it's Singapore who get the benefit from it, as Singapore economy is booming right now from the high skilled workers from Malaysia.

2. Malaysia is also have a demographic problem too, where some ethnic group became more and more religious. Where the number of religious people now, hugely outnumbered the hardworking people. That makes their economy progress became a hostage because of it, as a small numbered hardworking people not enough to support entire nation, their income became stagnant. If Malaysia focus on hardworking culture rather than fall into a religion utopia, thing will be different.

 

[cloud_9]

China's advantage is producing goods cheaply, the moment some other country produces cheaper than china you people will loose that advantage. This scenario will happen this decade.

Why can't we do that ? Are we waiting for someone's instructions.China until now has followed the eastern concept of devolpmemnt....Japan,Taiwan,Korea went through this process.

 

[Hellraiser007]

Why can't we do that ? Are we waiting for someone's instructions.China until now has followed the eastern concept of devolpmemnt....Japan,Taiwan,Korea went through this process.

India is in that path and is about to enter manufacturing sector , India's manufacturing policy and trade corridor through ASEAN, coupled with Japanese and other countries investments point to that.

There are huge trade corridors which are planned.

 

[cloud_9]

Malaysia is actually very ready to became high income country. There's several factors that people don't want to talk about it, the reason why Malaysia trapped in middle income situation.

1. Malaysia have world most ethnic discrimination policy. Some Malaysia ethnic group is actually ready to lift Malaysia economy up to the next level. But the discrimination makes this high educated people to leave the country and created a massive brain drain, the world worst too. Actually, it's Singapore who get the benefit from it, as Singapore economy is booming right now from the high skilled workers from Malaysia.

2. Malaysia is also have a demographic problem too, where some ethnic group became more and more religious. Where the number of religious people now, hugely outnumbered the hardworking people. That makes their economy progress became a hostage because of it, as a small numbered hardworking people not enough to support entire nation, their income became stagnant. If Malaysia focus on hardworking culture rather than fall into a religion utopia, thing will be different.

Add another 8 factors you will end up with issues India faces.

 

[StarCraft_ZT]

China's advantage is producing goods cheaply, the moment some other country produces cheaper than china you people will loose that advantage. This scenario will happen this decade.

China has been losing cheap human resources, that is a good sign, pushing government to elevate wages/salaries level, and forcing those weak companies that could not afford better reward for good employees to leave China. Only strong companies stay in China, only our wages will promote, that is the result. You wanna always been employees of western? Of course not.

 

[Hellraiser007]

China has been losing cheap human resources, that is a good sign, pushing government to elevate wages/salaries level, and forcing those weak companies that could not afford better reward for good employees to leave China. Only strong companies stay in China, only our wages will promote, that is the result. You wanna always been employees of western? Of course not.

First GOI need to make our economy a strong one.

 

[cloud_9]

India is in that path and is about to enter manufacturing sector , India's manufacturing policy and trade corridor through ASEAN, coupled with Japanese and other countries investments point to that.

There are huge trade corridors which are planned.

Planned o_o Lets tell the investors that we are planning stuff and they should wait for us.
Most people are not willing to setup a shop in India because of trivial law's and land issues.A huge chunk of investment has been cancelled during these last few years .

Economy page of Indian dailies is as depressing as the front page of Pakistani dailies.