Indian Economy: News and Discussion

[Mikesingh]

GCC gives investment into India and also remittances. So, the GCC gives oil for free indirectly . What Iran gives ? Iran gives nothing but acts arrogant

You seem to be pretty pissed off with Iran!! Well, they've given us a gateway to Afghanistan, the Central Asian Republics and further to Europe through Chabahar, haven't they? What more do you want?

Investment flows from the GCC to India are lopsided, with only the UAE and, to some extent, Oman being major source countries. UAE has 80% of GCC investment in India! All the other 5 countries of the GCC put together account for just 20%.

Compared to FDI inflows from India's leading partners such as Mauritius, Singapore, and the United States, GCC investment in India is quite modest.

However, I would hasten to add there is no doubt a surge of GCC FDI into India, and of UAE investment in particular in recent years, which has been funneled into the power, metallurgy industries and construction development sectors ― aligning closely with India's needs and priorities.

In war, all muslim countries will join hands. Shia sunni war is only civil war for now. But whenever outsider attacks, it is Islamic brotherhood

'Islamic brotherhood'? Have all the Muslim countries joined to fight against the US in the Middle East? Had they joined hands to support Syria against the US and their allies? Had they all joined together to fight off the US invasion of Iraq and Afghanistan? Simple answer - NO! They are all Muslim countries but as divergent as opposite poles.

There are no permanent friends whether religious or political, only permanent interests.

It is called civilian agreement where military use is not permitted. Chabahar is civilian agreement without permission for Indian military

Please show me the link where this is specifically mentioned in the agreement.

 

[ezsasa]

Just two examples of how Iran helped Pakis during the big wars. Granted that they were during the Shah time, but they continue to support them on Kashmir.

[SNIP]
Iran played an important role in the Indo-Pakistani war of 1965, providing Pakistan with nurses, medical supplies, and a gift of 5,000 tons of petroleum. Iran also indicated that it was considering an embargo on oil supplies to India for the duration of the fighting.[1] The Indian government believed that Iran had blatantly favored Pakistan.[1] After the suspension of United States military aid to Pakistan, Iran was reported to have purchased ninety Sabre jet fighter planes from West Germany, and to have sent them on to Pakistan.[1]

fighter planes from West Germany, and to have sent them on to Pakistan.[1]
[/SNIP]

[SNIP]
Although Pakistan's decision to join the Central Treaty Organisation (CENTO) in 1955 was largely motivated by its security imperatives regarding India, Pakistan did not sign on until Iran was satisfied that the British Government was not going to obstruct the nationalization of British oil companies in Iran.[1] According to Dr. Mujtaba Razvi, Pakistan likely would not have joined CENTO had Iran not decided to do so.[1]

Iran again played a vital role in Pakistan's 1971 conflict with India, this time supplying military equipment as well as diplomatic support against India. The Shah described the Indian attack as aggression and interference in Pakistan's domestic affairs;[13] in an interview with a Parisian newspaper he openly acknowledged that "We are one hundred percent behind Pakistan".[13] Iranian Prime Minister Amir-Abbas Hoveida followed suit, saying that "Pakistan has been subjected to violence and force."[13] The Iranian leadership repeatedly expressed its opposition to the dismemberment of Pakistan, fearing it would adversely affect the domestic stability and security of Iran[13] by encouraging Kurdish separatists to rise up against the Iranian government.[13] In the same vein, Iran attempted to justify its supplying arms to Pakistan on the grounds that, in its desperation, Pakistan might fall into the Chinese lap.[13] On the other hand, Iran changed its foreign priorities after making a move to maintain good relations with India.
[/SNIP]

During these conflicts both Iran and Pakistan were America’s friend.

 

[Advaidhya Tiwari]

You seem to be pretty pissed off with Iran!! Well, they've given us a gateway to Afghanistan, the Central Asian Republics and further to Europe through Chabahar, haven't they? What more do you want?

Investment flows from the GCC to India are lopsided, with only the UAE and, to some extent, Oman being major source countries. UAE has 80% of GCC investment in India! All the other 5 countries of the GCC put together account for just 20%.

Compared to FDI inflows from India's leading partners such as Mauritius, Singapore, and the United States, GCC investment in India is quite modest.

However, I would hasten to add there is no doubt a surge of GCC FDI into India, and of UAE investment in particular in recent years, which has been funneled into the power, metallurgy industries and construction development sectors ― aligning closely with India's needs and priorities.

The investment that comes via Singapore or Mauritius are not done by Mauritius or Singapore. GCC countries route investment via these countries too. So, it is false to say that Singapore with 5 million population invests $20 billion in India annually!

'Islamic brotherhood'? Have all the Muslim countries joined to fight against the US in the Middle East? Had they joined hands to support Syria against the US and their allies? Had they all joined together to fight off the US invasion of Iraq and Afghanistan? Simple answer - NO! They are all Muslim countries but as divergent as opposite poles.

There are no permanent friends whether religious or political, only permanent interests.

Religious interests are permanent. In case of USA, USA stays far away and these people can do very little. Moreover, in case of Iraq, GCC countries had serious anger against Saddam because of his past behaviour. USA attacked Iraq in 1990 at the request of GCC countries. Also, Iran is causing problems to GCC countries by being overly hasty and arrogant. Iran refuses to reason and listen to others. It simply wants only itself to be Islamic head and give no space to any others. So, the rivalry to become head of Islam exists between GCC and Iran. There is a reason why Pakistan is never sanctioned by USA. Pakistan is close to GCC and they don't allow USA to do it.

Nevertheless, if it is a direct warfare, then the Arab countries will not support USA. USA is losing in Afghanistan as it can't use brutal tactic. Same with everywhere else. This restraint is due to Arabs concern against USA. If USA uses brutal tactics, Arabs will withdraw petrodollar.Another thing that weakens Arabs is that they don't have water and hence can't grow food on their own. Lack o technology is also a big drawback which makes Arabs weak.

Overall, the Arabs have limits to their strength. But still if push comes, they will be Islamic brothers

Please show me the link where this is specifically mentioned in the agreement.

There never was any military agreement with Chabahar. SO, that itself annuls any possibility of military usage. India can use the port for transferring goods to Iran, not to dock military ships. The agreement is only about goods handling, not military.

During these conflicts both Iran and Pakistan were America’s friend.

The point I am trying to make is that Shia-Sunni is only power struggle that started to show who is better muslim. It started after 1979 revolution. So, the conflict is merely about civil power. The larger interest of Islam still is same

 

[Mikesingh]

Just two examples of how Iran helped Pakis during the big wars. Granted that they were during the Shah time, but they continue to support them on Kashmir.

[SNIP]
Iran played an important role in the Indo-Pakistani war of 1965, providing Pakistan with nurses, medical supplies, and a gift of 5,000 tons of petroleum. Iran also indicated that it was considering an embargo on oil supplies to India for the duration of the fighting.[1] The Indian government believed that Iran had blatantly favored Pakistan.[1] After the suspension of United States military aid to Pakistan, Iran was reported to have purchased ninety Sabre jet fighter planes from West Germany, and to have sent them on to Pakistan.[1]

fighter planes from West Germany, and to have sent them on to Pakistan.[1]
[/SNIP]

[SNIP]
Although Pakistan's decision to join the Central Treaty Organisation (CENTO) in 1955 was largely motivated by its security imperatives regarding India, Pakistan did not sign on until Iran was satisfied that the British Government was not going to obstruct the nationalization of British oil companies in Iran.[1] According to Dr. Mujtaba Razvi, Pakistan likely would not have joined CENTO had Iran not decided to do so.[1]

Iran again played a vital role in Pakistan's 1971 conflict with India, this time supplying military equipment as well as diplomatic support against India. The Shah described the Indian attack as aggression and interference in Pakistan's domestic affairs;[13] in an interview with a Parisian newspaper he openly acknowledged that "We are one hundred percent behind Pakistan".[13] Iranian Prime Minister Amir-Abbas Hoveida followed suit, saying that "Pakistan has been subjected to violence and force."[13] The Iranian leadership repeatedly expressed its opposition to the dismemberment of Pakistan, fearing it would adversely affect the domestic stability and security of Iran[13] by encouraging Kurdish separatists to rise up against the Iranian government.[13] In the same vein, Iran attempted to justify its supplying arms to Pakistan on the grounds that, in its desperation, Pakistan might fall into the Chinese lap.[13] On the other hand, Iran changed its foreign priorities after making a move to maintain good relations with India.
[/SNIP]

That was when Mohammad Reza Pahlavi was in power! He was in the US camp with Pak whereas India was in the Soviet camp. The 1979 Iranian Revolution transformed Pakistan and Iran into rivals instead of partners. Where India is concerned, there was a paradigm shift after he was deposed. India and Iran have also signed a defence cooperation agreement in December 2002.

Excerpt from Pak media, 2002:

"No official spokesman, from General Musharraf to PM Jamali to Information Minister Sheikh Rashid to Major General Rashid Qureshi to Foreign Office Aziz Khan, have yet provided the nation any explanation of how and why the brotherly, Islamic nation and a trusted friend and ally of Pakistan, Iran, has turned into a strategic partner and military ally of India, and shockingly and publicly so, against Pakistan."

Iran frequently has warned Pakistan of cross border military action if Pakistan did not reign in militants operating against Iran from its soil. Even today the relations between Iran and Pak are pretty prickly and not so smooth. Of course all is not hunky dory with Indo Iranian relations as well. However, Iran will never support Pak in any future war with India unlike when Iran was ruled by the Shah of Iran when equations were different than what they are today.

 

[Tanmay]

...................................

I don't understand the exact grievance.

Is it only for nationalisation of ownership of GSTN?

The GSTN software and infrastructure cannot be developed/operated by government. Some private company is surely required

 

[indiatester]

During these conflicts both Iran and Pakistan were America’s friend.

That was when Mohammad Reza Pahlavi was in power! He was in the US camp with Pak whereas India was in the Soviet camp. The 1979 Iranian Revolution transformed Pakistan and Iran into rivals instead of partners. Where India is concerned, there was a paradigm shift after he was deposed. India and Iran have also signed a defence cooperation agreement in December 2002.

Excerpt from Pak media, 2002:

"No official spokesman, from General Musharraf to PM Jamali to Information Minister Sheikh Rashid to Major General Rashid Qureshi to Foreign Office Aziz Khan, have yet provided the nation any explanation of how and why the brotherly, Islamic nation and a trusted friend and ally of Pakistan, Iran, has turned into a strategic partner and military ally of India, and shockingly and publicly so, against Pakistan."

Iran frequently has warned Pakistan of cross border military action if Pakistan did not reign in militants operating against Iran from its soil. Even today the relations between Iran and Pak are pretty prickly and not so smooth. Of course all is not hunky dory with Indo Iranian relations as well. However, Iran will never support Pak in any future war with India unlike when Iran was ruled by the Shah of Iran when equations were different than what they are today.

Agreed that they were during the time of the Shah. But quite a few muslim nations extended money and material support to Pakistan. This was from Indonesia on the East to Libya on the West.
My limited point being that if hostilities breakout, Iran may not be in India's favour and may support Paki's if the right strings are pulled.

 

[ezsasa]

I don't understand the exact grievance.

Is it only for nationalisation of ownership of GSTN?

The GSTN software and infrastructure cannot be developed/operated by government. Some private company is surely required

It’s about private ownership of GSTN, that too a private bank a major share holder.

 

[sorcerer]

India conceptualising transport corridor between Asia, Europe: Prabhu

India is conceptualising a transport corridor which can be a very important link between Asia and Europe, for which Uzbekistan can serve as a major transit point, Union Minister Suresh Prabhu said today.


Read more at:
//economictimes.indiatimes.com/articleshow/65998648.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

 

[Kshatriya87]

Annulled? Says who? Iran will never support Pak in a war against India. Ideological differences will keep a Shia Iran away from a Sunni Pak which in any case does not have very good relations with Iran.

By your logic, all Muslim countries are one because they are Islamic countries! Are you aware what's happening in the Middle East? Shia and Sunni dominated countries are the biggest enemies of each other. So all this hocus pocus of a so called Muslim Ummah is balderdash.

And there is no such thing as a 'Peacetime Treaty' between India and Iran. I don't know where you got this from!



We can buy from anywhere in the world, but unlike other potential suppliers, Iran offers economic sweeteners on freight and insurance on its oil. Iranian oil is a lucrative buy for refiners in India as the Persian Gulf nation provides 60 days of credit for purchases, double the amount of time given by other producers. Do you think SA or the GCC or even the US will oblige India by giving concessions like Iran does? Not by a long shot.

Oil imports from the US has limitations as the US currently has only one export terminal that can accommodate 2-million-barrel tankers preferred by faraway customers in Asia keeping transportation costs in view, and expansions at other ports aren’t expected to be completed before 2020. Thus the cost of shipping oil from there needs to be taken into account too.

Iraq and Kuwait may be willing to fill in, but the changed dynamics would raise India's oil import bill. Be prepared to then shell out Rs 100-110 a litre for petrol as of today. Margins will be hit unlike Iran which offers the best commercial terms, and all round inflation will cause considerable pain. Are you ready for that?

In a nutshell, Iranian oil is far cheaper than importing from any other country.



.

Iran has helped pakistan in 1965 war already. Also, I've been to Iran. Their documentaries on kashmir are disturbing for Indians and are always pro pakistan. They continue to keep the kashmir issue alive by giving kashmir pro pakistan news every day on national television.

As you know Iranian media is controlled by the regime, its easy to guess that regime supports pakistan on kashmir issue.

 

[Kshatriya87]

India conceptualising transport corridor between Asia, Europe: Prabhu

India is conceptualising a transport corridor which can be a very important link between Asia and Europe, for which Uzbekistan can serve as a major transit point, Union Minister Suresh Prabhu said today.


Read more at:
//economictimes.indiatimes.com/articleshow/65998648.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

So there's a russian north-south corridor coming in going russia-kazakhstan-iran-oman-india etc. Then there's a european counter coming in for china's BRI. Now there's an Indian corridor.

Must say one thing, china's BRI (although not complete) has helped a lot kick starting these other corridors.

 

[Kshatriya87]

Centre cuts gross borrowing for second half by ₹70,000 crore
Economic affairs secretary Subhash Chandra Garg says the government is confident of meeting the fiscal deficit target of 3.3% of GDP

 

[Mikesingh]

There never was any military agreement with Chabahar. SO, that itself annuls any possibility of military usage. India can use the port for transferring goods to Iran, not to dock military ships. The agreement is only about goods handling, not military.

Let me put you wise. Chabahar cannot be treated in isolation in the gamut of defence cooperation between India and Iran. Are you aware of the Indo- Iran Defence Cooperation Agreement signed in 2002?

This strategic partnership has significantly put in place military and energy deals estimated over $35 billion. The wide-ranging cooperation involving all three military services is quite a turnaround in the existing strategic situation in Southern Asia especially since the last two decades.

Further, Iran also solicited Indian assistance to help develop new batteries for three Kilo-class submarines it had purchased from Russia. The submarine batteries provided by the Russians were ill-suited to the warm waters of the Persian Gulf, and India possessed substantial experience operating Kilo-class submarines in warm waters. In addition, Iran remains inclined to acquire Indian assistance for other upgrades to Russian-supplied military hardware, which includes MiG-29 fighters, warships, subs, and tanks.

India has become a source of conventional military equipment and spare parts for Iran, providing expertise in electronics and telecommunications and holding joint training exercises with Iranian armed forces. Tehran also seeks New Delhi to provide combat training for missile boat crews as well as simulators for ships and submarines and purportedly anticipates that India provide midlife service and upgrades for fighters, warship, and subs in Indian dockyards.

Significantly, the New Delhi Declaration sought to upgrade defence cooperation between India and Iran specifically in the following areas:

• Sea-lane control and security.
• Indo-Iran joint naval exercises.
• Indian assistance to Tehran in upgrading its Russian made defence systems.

According to reports, India would be given access to Iranian military bases in the event of a war with Pakistan. India reportedly hoped that the 2003 New Delhi Declaration would pave the way for upgrades of Iran's Russian-made conventional weapon systems by India. While Indo-Iranian deals along these lines have not yet materialized, Iran has sought Indian advice in operating missile boats, refitting Iran's T-72 tanks and armored personnel carriers, and upgrades for MiG-29 fighters.

In fact, soon after signing the Defence Cooperation Agreement, Iran and India conducted their first joint naval maneuvers in the Arabian Sea which covered sea-lane control and security.

Adding on to the military ties, India has also developed intelligence outposts in Iran, including the Indian consulate in Zahedan and a relatively new consulate in Bandar Abbas, which will permit India to monitor ship movements in the Persian Gulf. The two countries have not only undertaken to cooperate in space research but collaborate as well.

There's more but enough to tell you that there's more than meets the eye in defence cooperation with Iran.

 

[Haldiram]

As you know Iranian media is controlled by the regime, its easy to guess that regime supports pakistan on kashmir issue.

That's true. There are a lot of Shia terror outfits operating in the valley. All countries try to use our festering Kashmir wound as a bargaining chip for their own gains elsewhere (same way India maintains support for the Palestine cause, much to the annoyance of the Jews).

I'm guessing the ISI's ethnic cleansing of Shia groups in Gilgit might have given Iran some food for thought and tested their patience. There are protests in POK and most of these demonstrators are Shia as well. Iran is involved on both sides for its own gain. Kashmir is a strategic choke point, it overlooks the trade route from Asia to Europe via the silk-route. Anyone who has any influence here can get himself a seat at the high table to cut deals with the big powers.

I wouldn't be surprised if even Israel is involved in Kashmir, because their arms sales are directly linked to the turmoil in Kashmir. Once you have a wound like that, everyone wants to poke it. The EU is already involved. They may not 'win' anything, but even if they withhold India from getting connectivity to the silk-route, and prevent us from growing too powerful, it's worth it for them. Ironically, it is China which is inviting you to link-up with the silk-route. If we can't build it ourselves, we might as well link-up. Connectivity to Central-Asia will potentially 5X the size of our economy in under a decade. They are a big source of energy (Kazakhstan supplies Uranium) and are a large market to sell Indian finished products. We can use the gains made from trade to grow the Navy and deter China from aggression through Naval power. We've already lost too much potential because of Kashmir.

 

[Mikesingh]

Ironically, it is China which is inviting you to link-up with the silk-route. If we can't build it ourselves, we might as well link-up. Connectivity to Central-Asia will potentially 5X the size of our economy in under a decade. They are a big source of energy (Kazakhstan supplies Uranium) and are a large market to sell Indian finished products. We can use the gains made from trade to grow the Navy and deter China from aggression through Naval power. We've already lost too much potential because of Kashmir.

India has a continent-crossing plan of its own - the North-South Transport Corridor (NSTC), which aims to better link India with Iran, Russia, the Caucasus, and the Central Asian Republics.

The NSTC is a 7,200-kilometer multimodal trade corridor that extends from India to Russia, linking the Indian Ocean and Persian Gulf to the Caspian Sea. Goods travel by sea from Jawaharlal Nehru and Kandla ports to Bandar Abbas in Iran, then go by road and rail north through Baku to Moscow and St. Petersburg.

A prospective second route goes along the eastern side of the Caspian Sea, to Kazakhstan -Turkmenistan-Iran railway and integrating with the North–South Transnational Corridor.

The North South Transport Corridor

This corridor will decrease the cost and time needed to ship goods between cities such as Mumbai, Bandar Abbas, Tehran, Baku, Moscow, and St. Petersburg, which will bolster trade throughout a region that is rapidly integrating together and developing.

Currently, transporting goods between the two countries requires a convoluted journey by ship through the Arabian Sea, Suez Canal, Mediterranean Sea, North Sea, and Baltic Sea, amounting to a minimum of 45 days (Blue line on map above). The NSTC is meant to be the remedy for this.

 

[Akshay_Fenix]

...................................

 

[nongaddarliberal]

Because of the massive rupee depreciation our GDP in dollar terms remains at 2.6 trillion in 2018, same as 2017, instead of the 2.85 trillion it should have been. And this is inspite of 7% + GDP growth. I don't know how we will attain our goal of 10 trillion by 2030 at this rate. And let's not get into PPP. You can't pay for rafales with PPP dollars. Until we achieve a trade surplus, the rupee will always remain this volatile. We can't keep compensating for the trade deficit with remittances and FDI. Clearly that doesn't work when oil prices shoot up.

 

[Advaidhya Tiwari]

Because of the massive rupee depreciation our GDP in dollar terms remains at 2.6 trillion in 2018, same as 2017, instead of the 2.85 trillion it should have been. And this is inspite of 7% + GDP growth. I don't know how we will attain our goal of 10 trillion by 2030 at this rate. And let's not get into PPP. You can't pay for rafales with PPP dollars. Until we achieve a trade surplus, the rupee will always remain this volatile. We can't keep compensating for the trade deficit with remittances and FDI. Clearly that doesn't work when oil prices shoot up.

FDI is political tool. It is based on diplomatic leverage of India and is pegged to global commodity prices. FDI are not simply commercial operations but mostly involve political angle. By the way, we don't care for buying Rafales or other import of defence much in the future. These are deals for current technology needs and technology offset with intention of getting fully indigenous by 2025. What matters is production levels of India and indigenous manufacturing technology.

About 7% growth, the nominal growth is 7% + inflation. Hence the growth in rupee terms is around 12%, taking inflation at 5%. This is same as the amount by which rupee depreciated and hence canceling the growth in dollar terms. The growth of Indian economy in dollar terms have exceeded the real GDP growth of India for last 3-4 years. Rupee should have ideally depreciated by 2 per dollar every year to accomodate inflation difference but actually appreciated and had bloated Indian GDP in dollar terms. It got corrected now.

So, PPP GDP will be enough as technology becomes more and more indigenous. While for the time being, there is FDI linked to diplomacy that will keep Indian economy afloat and pay for many imports.

 

[nongaddarliberal]

FDI is political tool. It is based on diplomatic leverage of India and is pegged to global commodity prices. FDI are not simply commercial operations but mostly involve political angle,

Aboyt 7% growth, the nominal growth is 7% + inflation. Hence the growth in rupee terms is around 12%, taking inflation at 5%. By the way, we don't care for buying Rafales or other import of defence much in the future. These are deals for current technology needs and technology offset with intention of getting fully indigenous by 2025. What matters is production levels of India and indigenous manufacturing technology.

So, PPP GDP will be enough as technology becomes more and more indigenous. While for the time being, there is FDI linked to diplomacy that will keep Indian economy afloat and pay for many imports.

Yes, real growth was 7% and inflation was 5% which brings nominal growth to 12%. But the rupee depreciated 12% which brings GDP growth in dollar terms to 0. Regardless of how much we do or do not value imports, this is a serious problem.

Btw, are you also in Russia?

 

[Advaidhya Tiwari]

Yes, real growth was 7% and inflation was 5% which brings nominal growth to 12%. But the rupee depreciated 12% which brings GDP growth in dollar terms to 0. Regardless of how much we do or do not value imports, this is a serious problem.

Btw, are you also in Russia?

I am using proxy based in Russia. I thought you too were using the same proxy as I am!!

Please read my updated and edited comment above. I will reproduce some aspect of it to answer you:

The growth of Indian economy in dollar terms have exceeded the real GDP growth of India for last 3-4 years. Rupee should have ideally depreciated by 2 per dollar every year to accommodate inflation difference but actually appreciated and had bloated Indian GDP in dollar terms. It got corrected now. The following chart of IMF past and projected GDP shows it all:

The data is only till 2017 GDP. 2018 and 2019 are projected ones. Just look at the jump:


GDP 2013-14: 1,857,237
GDP 2014-15: 2,033,652
GDP 2015-16: 2,089,867
GDP 2016-17: 2,273,556
GDP 2017-18: 2,611,012

The growth in nominal GDP for:

FY15 = 9.5%
FY16 = 2.7%
FY17 = 8.8%
FY18 = 14.8%

The total growth from FY14 to FY18 in nominal value = 40.6%

The real growth of India for last 4 years is 7.4%, 8.2%, 7.1%, 6.7%. The total growth must have been: 32.7% between FY14 to FY18. With this year's growth of 7.2%, it will reach about 40.6% which is the same nominal value as above. So, the overall is compensated

Here is rupee price fluctuation which is responsible for the anomaly:

The rupee was around 68-69 in 2016 but went to 63-64 in 2017 without any reason and despite oil price increasing from $50 to $70. If we take the nominal increase as Rs 2-2.5 per annum as inflation adjustment between Indian and world inflation, the correct value of rupee is indeed Rs 73-74 right now

 

[nongaddarliberal]

I am using proxy based in Russia. I thought you too were using the same proxy as I am!!

Please read my updated and edited comment above. I will reproduce some aspect of it to answer you:

The growth of Indian economy in dollar terms have exceeded the real GDP growth of India for last 3-4 years. Rupee should have ideally depreciated by 2 per dollar every year to accommodate inflation difference but actually appreciated and had bloated Indian GDP in dollar terms. It got corrected now. The following chart of IMF past and projected GDP shows it all:
View attachment 28548

The data is only till 2017 GDP. 2018 and 2019 are projected ones. Just look at the jump:


GDP 2013-14: 1,857,237
GDP 2014-15: 2,033,652
GDP 2015-16: 2,089,867
GDP 2016-17: 2,273,556
GDP 2017-18: 2,611,012

The growth in nominal GDP for:

FY15 = 9.5%
FY16 = 2.7%
FY17 = 8.8%
FY18 = 14.8%

The total growth from FY14 to FY18 in nominal value = 40.6%

The real growth of India for last 4 years is 7.4%, 8.2%, 7.1%, 6.7%. The total growth must have been: 32.7% between FY14 to FY18. With this year's growth of 7.2%, it will reach about 40.6% which is the same nominal value as above. So, the overall is compensated

Here is rupee price fluctuation which is responsible for the anomaly:
View attachment 28550

The rupee was around 68-69 in 2016 but went to 63-64 in 2017 without any reason and despite oil price increasing from $50 to $70. If we take the nominal increase as Rs 2-2.5 per annum as inflation adjustment between Indian and world inflation, the correct value of rupee is indeed Rs 73-74 right now

Yes, I also realize that the rupee appreciated last year for no real reason and the correction has come this year. My point is we wouldn't have to worry about any of this if we had a trade surplus which a developing country with low wages should have. I remember making fun of the pakis this January that their GDP grew 0% in dollar terms due to their currency depreciation in 2017, and now the same thing has happened to us this year.

P.S. no I actually live in Moscow