The Secret Nuke Sub Deal

[Bull]

Rupee appreciation at its current level hasn't made India any less competitive since costs of goods & services in India are still much cheaper. The only problem is the discrepancy between the allocated amount of fund and the final bill. If I place an order for 10000 automobile components from an Indian firm I make an estimate based on current curreny conversion rate. Once the deal is sealed, the manufacturer establishes the production line, puts the team together & starts with the production. Once the goods are ready in say 6 months time, the final bill is prepared based in rupee value. Now, if within these 6 months, the local currency has appreciated then it would escalate the cost in dollar terms & this could be way above the estimated amount & the fund allocated for the project.

This uncertainty is what is cause of panic.

All ig ticket arrangements are having foward cover, its new deals which are under discussion that get affected.

 

[solid snake]

AM already answered you in #19 mate, the yuan is heavily under valued and unlike India China has an export oriented economy heavily dominated by cheap consumergoods and semipreparates.
Efficient infrastructure is another reason Chinese success.

Concern was over sharp & quick appreciation of rupee & not the value of rupee being too strong. When a company allocates funds for the project they earmark a certain amount towards the project. So if currency appreciates before the end of the project, it escalates the cost of project. So there can be a big difference between the allocated fund & final bill.

I was just joking guys. God forbid that anyone should launch even 1 nuke.