The ascendency of India as an economic world power

Indian rupee has risen by over 10 percent in this fiscal year so far. Recently, Moody’s corporation, the USA based credit rating company, has revealed it in a report. This rise in rupee has been beneficial for the import sector companies as they have to give less money while importing goods. However, it is creating some problems for the export sector. India rupee is becoming strong and it reflects the condition of Indian economy.

India’s export sector is far behind than import in terms of the contribution to GDP. Export contributes around 15 percent to India’s GDP. According to Moody’s, lack of adequate infrastructure is the main problem for Indian economy.

The Hindu reported:

The rating agency also notes that poor infrastructure has been the main hindrance in the development of Indian economy. However, the government's plans to set up Special Economic Zones (SEZ) to boost infrastructure development and manufacturing would aid in increasing production, trade and economic growth, Moody's said.

Meanwhile, the report stated, there have been major farmer protests related to land acquisition for SEZs as agriculture still remains the primary source of income for 60 per cent of the Indian population.

Indian government need not to be worried about the strength of Rupee at this moment. However, the government must reassess its strategy if the export sector gets hit by a strong Rupee against Dollar.