The other face of the falling rupee
Riddhi Doshi, Hindustan Times September 01, 2013, First Published: 01:53 IST(1/9/2013) | Last Updated: 02:39 IST(1/9/2013)
Mumbai-based husband and wife duo Darshan, 35, and Neha Shroff, 32 are personal shoppers who cater only to NRIs and foreigners. They also plan weddings, with 40% of their clients non-resident Indians from the US and UK.
Over the past few months, their three-year-old company has seen a boom in clients wanting to pay in foreign currencies, because they can get so much more value for their money here now.
“Because the rupee is depreciating, clients are spending more on their weddings and during trips in India,” says Darshan. “Overall, this has translated into an increase of 5% to 10% in our revenues over the past year.”
Over the past five weeks, the rupee has slid from 58 against the dollar on July 24 to an all-time low of 68.80 on August 28. As of August 31, it stood at 66.65 against the US dollar.
If this trend continues, the Shroffs expect things to improve further in January, peak wedding season in India. “We expect to see at least 15% more NRIs get married in India, if the rupee doesn’t rally before then,” says Darshan.
The couple from the country’s commercial capital, Mumbai, are not the only ones benefiting from the slide of the rupee.
“Gems and jewellery companies and other export strongholds such as textiles and apparel, leather, and those who export services abroad will benefit,” says economist and political analyst Ajit Ranade. “Entrepreneurs and small and medium enterprises that faced competition from imports also stand to benefit. This Ganeshotsav, for instance, many less idols are likely to be imported from China.”
Others seeing their net incomes rise as a result of the rising cost of foreign currency include charitable trusts and social enterprises that get funding in dollars and families with members working abroad and sending money home in other currencies.
“People who export services, especially to first-world countries, are obvious benefactors,” says Aradhoot Nadkarni, professor of economics with the Mumbai university.
“Overall, social enterprises getting funds in foreign currencies stand to get as much as 20% more upon conversion,” says Deval Sanghavi, partner and co-founder of Dasra, a strategic philanthropy foundation that acts as a consultant in the non-profit sector. “Funding had significantly reduced over the past three years, because of the global recession, so in a sense the depreciating rupee is helping these organisations.”
On a roll.
Advertising professional Palak Mody, 29, has been working in Dubai for eight years and is one among the many Indian professionals sending money home in foreign currencies, to be converted into increasingly large sums and salted away here.
“When I started working in Dubai, 1 UAE dirham fetched Rs. 8. Now it’s more than double,” says Mody. “I was considering moving back to India to get married and settle down. Now, I have cancelled all such plans.”
Instead, Palak now visits home on shopping sprees, and sends more money home in remittances to make the most of the high exchange rate and thus boost her savings.
“The many Indian professionals working in the information technology, consulting services, KPOs and BPOs in the US and UK are, at the current conversion rates, earning 20% more in Indian rupees,” says Sunil Goel, managing director of head-hunting company GlobalHunt. “Over the past two months, in fact, we have received 15% to 20% more resumes from those seeking jobs abroad. Our business is also growing as a result, as are our revenues.”
* A booster shot for medical tourism in New Delhi
Medical tourism in Delhi has seen a boost, as more foreigners seek to cash in on the effective slash in prices caused by the sharp devaluation of the rupee.
Apollo Hospital, for instance, saw a 12% growth in the number of foreign patients last year, but in the past two weeks, has recorded a 15% growth over the number of enquiries from overseas patients.
“As the rupee depreciates, it pushes up our costs, because we are dependent on imports. But the positive side is that foreign tourists find it more attractive to come to India for their treatment,” says Dr Anupam Sibal, group medical director for Apollo Hospitals Group, which earns about 5% to 10% of its total revenue from international tourists.
At the city’s Sir Ganga Ram Hospital, enquiries from foreign patients have risen by about 10% over the past week.
The Capital’s Fortis Healthcare hospital, meanwhile, has seen the number of foreign-patient bookings jump by about 30% this financial year, compared with last year. This hospital received more than 10,000 foreign in-patients last year and earns about 10% of its total revenue from medical tourism.
“We are definitely seeing a rise in the number of bookings by international tourists over the past two weeks, with the devaluation of rupee,” says Vishal Bali, Group CEO for Fortis Healthcare. “And we are expecting higher growth rate in near future.”
Max Healthcare in Delhi has received about 5,000 in-patients since January. “Though there has been no spurt as yet in the number of enquiries from foreigners, there has been a 25% to 30% rise in the number of foreign patients registering this year over the previous financial year,” says a hospital source.
India treated close to 1 million foreign patients in 2012, a number that is expected to go up by about 10% by the end of 2013.
(As told to Sidhartha Dutta)