Fuel, gadgets to get costly soon

Fall in rupee is expected to lead to increase in fuel prices and hike input costs for consumer durables, mobile phones and auto industry.

Consumer Electronics and Appliances Manufacturers Association ( CEAMA) president and president and CEO, Panasonic India and South Asia Manish Sharma said that the continual strengthening of the US dollar is putting pressure on the overall inputs costs leading to a constant rise in commodity prices.

“In less than 3 weeks this the second time the rupee has hit an all- time low, touching the ` 70 mark for the first time in history. If this trend soon hits a tipping point, it will have an impact on price within the white goods industry, especially now when we have begun our descent into the festive season,” added Mr Sharma.

A representative of the auto industry said that it is difficult to take a decision on increasing cars prices on short term fall in rupee. “We will have to see the trend for sometime,” he said.

Society of Indian Automobile Manufacturers, DDG, Sugato Sen said that it is difficult to talk about impact on autoindustry over night. “Also its not only about US dollar. But we will have also to see how rupee has fared against Japanese and Korean currencies. It is not necessary dollar which impacts,” said Mr Sen.

Prices of mobile phones like iPhone which imports many of its models could also increase, said analysts. Also mobile companies which import many parts like camera, and processors will also be under- pressure.

The dip will also increase fuel prices. This will increase India’s import bill, fuel subsidy, and impact current account deficit ( CAD).

A 10 per cent increase in crude oil price could potentially increase retail inflation by 0.2- 0.3 per cent, increase CAD/ GDP ratio by 0.3 per cent and lower overall GDP growth by 0.1 per cent. India’s fuel subsidies could total ` 34,000- 53,000 crore in FY19, the highest since FY15.