Rupee weakened against dollar

On the one hand, the impact of the huge fall in rupee is being seen on the economy. Its impact can also be seen on the costs of consumer electronics, car companies and companies making fashion and beauty products. Due to which everything from lipstick to car can become expensive. The cost of such companies whose imports play a big role in their business may increase by 3 to 7 percent. The companies will compensate for this by increasing the prices.

Rupee weakened against dollar

For the first time, the rupee has crossed 90 against the dollar, and this could be the reason why many companies increase the prices of electronics, beauty products and cars. After the recent tax (GST) cut, sales of these sectors had increased rapidly, but now this benefit may backfire. The companies whose most of the goods or parts come from outside are the most troubled. Despite the increase in the prices of raw materials, many companies had avoided increasing the prices because the government could raise questions on increasing the prices after the GST cut.

Smartphones, laptops will be expensive

Companies making smartphones, laptops, TVs and large home appliances have made it clear that they will increase prices by 37% between December and January. Due to weak rupee, memory chips, copper and other parts have become expensive. In these products, up to 3070% of the expenditure comes from imported goods only.

Super Plastronics CEO Avneet Singh Marwah said, the benefit of GST cut will be completely lost due to falling rupee and cost of parts. The prices of memory chips have increased six times in four months. We fear that demand may slow down again. Industry officials say that they had estimated the expenses when the rupee was 8586 per dollar, but now with it crossing 90, the entire calculation has changed. Many companies did not increase prices despite increasing expenses since October because they could be accused of making profits after GST.

Now companies have started informing retailers about the price increase. Havells will increase the prices of LED TV by 3%, Super Plastronics by 710% and Godrej Appliances will increase the prices of refrigerators and ACs by 57% from January. Energy efficiency ratings are also becoming stricter since January, which will further increase the pressure. Kamal Nandi, business head of Godrej Appliances, said that it will be a compulsion to increase the prices in January. If the rupee falls further, another increase may have to be made in the March quarter. The entire benefit of GST cut will be lost.

Impact on beauty and auto sector also

India's fast-growing beauty market, which includes brands like Shiseido, MAC, Bobbi Brown, Clinique and The Body Shop, will also be directly affected, as most of their goods are imported. On top of that, GST on cosmetics is also only 18%, which means there is no relief. Biju Kasim, CEO of Shoppers Stop Beauty, said, the weak rupee increases the cost of our imported beauty products. This puts pressure on our margins. Increasing the prices of some high-end products may become a compulsion in future.

The impact is also visible on automobile companies. Recently, two-wheeler and car companies had reduced prices by taking advantage of the GST cut, due to which sales had increased in October and November, but now this benefit may be lost due to falling rupee.

The price of cars will also increase

Mercedes-Benz India MD Santosh Iyer said, prices of luxury cars may increase. We are considering increasing the prices from January 26. Audi India is also thinking the same, but it has not been decided yet. The government had reduced GST on small vehicles and two-wheelers from 2831% to 18%, which brought down prices by about 9% and led to a sharp jump in sales. But now the fluctuations in dollar-rupee may slow down this growth again.