The Times of India
Rising rupee & the fall of almighty dollar 7 May, 2007 l 0212 hrs IST By Chidanand Rajghatta
Traveling in the west is an expensive proposition for most Indians. At least it used to be. Up until a few years back, it was customary for Indians visiting the United States, especially middle class first time travellers, to constantly convert dollar costs into rupees and mutter how costly things are. ''Six dollars for a sandwich? Baap re, that's almost Rs 300. Too much!'' you could hear them think.
Conversely, well-settled NRIs (non-resident Indians) visiting home would convert rupee costs into dollars and marvel at how inexpensive things are. Some years back, two desi classmates who had done well in US returned home for a vacation and met at a popular eatery they had patronised when they were in college. After eating to their hearts content, they chuckled at the tab of Rs 80 less than two dollars. Ah, good old India!
Over the past decade, both scenarios and both sentiments — have begun to change. More recently, expats convert rupee expenses to dollars and goggle at how expensive India has become. Our metropolises, despite being urban ghettos, rank among the most expensive real estate in the world. Top-end hotel tariffs are insane. Increasingly, quality goods and services are becoming costlier, rapidly undermining India's cachet as an attractive low-cost market.
Sure, the dollar and pound still go some way. You can get a modest meal at a modest eatery for a couple of bucks — ten rupees to a hundred.
But dinner for two at an upscale restaurant can also set you back by a couple of thousand rupees — and more if you add a drink or two. You can still buy a shirt or a pair of trousers for a few hundred rupees; you can also splurge thousands on a designer brands.
What is starting to astonish visitors is how many Indians are able to afford the high-end. There are still 400 million people who live on a dollar a day, but it seems many people have a lifestyle that's more in tune with dollar-a-minute earnings.
Of course, if you count even 1% of high-wage earners among a billion people that still adds up to a sizable 10 million (population of Belgium).
But it is the change in mental attitude about spending that is striking. It's a good bet that Nokia has sold more high-end phones in India than in Belgium. For instance, young folks in India seem to think nothing of picking up a pair or jeans in one of those sleek new malls paying Rs 1600, almost $40 at today's exchange rate. In contrast, you can buy the same in US for less than $20. Dollar earning expats who would pick up the dinner tab in India now hang back quietly while eager Indian hosts whip out their credit cards. Indians are learning the American way if you have a good thing going, overdo it.
Part of the reason for all this, aside from the rising salaries in India, is the fall of the ''Almighty Dollar.'' A near 20% rise in rupee strength vis-a-vis the US dollar from a couple of years ago means your Disneyland dreams are 20% cheaper.
A battered dollar means Americans find their vacations more expensive. The world isn't worshipping at the altar of the almighty dollar anymore.
-- My humanity is in feeling we are all voices of the same poverty. - Jorge Louis Borges