If the dollar and rupee become equal, meaning 1 dollar = 1 rupee, it won’t just be an exchange rate change, but it could completely transform the Indian economy. Currently, one US dollar is equivalent to approximately ₹83, which is why it costs India more to import any foreign product. However, if the two currencies become equal, foreign goods and services will become so affordable that even ordinary consumers will be able to experience an international lifestyle.
Foreign Goods Will Become Cheaper and Accessible
Consumers will benefit the most from the dollar and rupee being equal, as almost every foreign product will become cheaper in India. For example, the iPhone, which currently costs $999, or ₹83,000, could cost just ₹999. Furthermore, products like branded clothing, foreign chocolates, cars, laptops, and other electronics will become accessible to ordinary Indians. Petrol and diesel, whose prices are determined by international crude oil, could also become significantly cheaper. This will reduce the cost of transportation, freight, and production.
The dream of foreign travel and higher education will become a reality
With the dollar and rupee equalized, traveling abroad, studying, or receiving medical treatment will become extremely affordable. Today, Indian students spend lakhs of rupees to study in countries like the US, UK, and Australia, but with the exchange rate equal, that same expense will be limited to a few thousand rupees. The tourism sector could also see a significant boom, as ordinary Indian citizens will now be able to travel to countries like Europe and the US with ease.
Exports, Investment, and Employment Will Be Impacted
However, this situation also has some serious disadvantages. When the dollar and rupee become equal, Indian products will become more expensive in the international market. This will directly impact exports, potentially increasing India’s foreign trade deficit. India is an export-oriented country, and in such a situation, declining exports will lead to lower production, which will impact jobs in factories and industries. Furthermore, the Indian market will become more expensive for foreign investors, potentially slowing investment flow.
Crisis in the IT and Outsourcing Sector
The IT and BPO industries are India’s major strengths, but if the dollar and rupee become equal, their profits could decline. Today, these companies receive payments in dollars, which is how they generate profits. If the value of one dollar falls to ₹1, their profits could fall by up to 80%. This could jeopardize the jobs of thousands of young people, and the benefits of India’s affordable services, which the world has been enjoying, could be lost.
