IANS

New Delhi, May 5: If an American NRI visits India now, his dollars will buy much less. This is because the Indian rupee has strengthened against the dollar since 2002, crossing the watershed of Rs41 to one dollar last week.

By this crossing, India joined the top dozen countries in the trillion-dollar club. The Indian economy is a trillion-dollar economy since its GDP is now valued at Rs41 trillion. In 1998, the dollar was valued at Rs41.26 but the Indian economy was not so big in terms of GDP.

Then the dollar become stronger vis-à-vis the rupee to 43.05 on its average annual rate in 1999, moving up to 44.94 in 2000, 47.18 in 2001, touching a peak of 48.59 in 2002. At one point in 2002, the dollar commanded over Rs49! Then it started declining to 46.58 in 2003, easing off to 45.31 in 2004, edging down to 44.10 in 2005 and touching 43.21 in 2006.

Now when the dollar touched Rs41, India entered this exclusive Club because its economy has grown dramatically in the last nine years.

So, is it an occasion for NRIs to celebrate India's progress?

For a start, the NRI visitor will get less for his dollars in India. This is a lot less than Rs48-49 he got for his dollar in 2002. But his Indian relative visiting him on holiday in the US will have a few more dollars to spend there.

If the NRI wants to buy property in India, it will make a dent in his cash flow, as he will transfer many more dollars for the same property price. He would have been better off if he had bought his property five years ago when the prices were not so astronomical and the dollar was at a peak versus the rupee. For NRIs importing goods and services from India, may pay more but in almost all cases, Indian exporters always quote in dollars and this will not make much difference.