Rupee depreciation could affect travel, education in the US for Indians

 

Rupee depreciates against the US dollar

In 2018, the Indian currency, the Rupee has fallen to an all time low against the US dollar.On October 9 2018, one US dollar was worth Rs 74.39. The increase in crude oil prices is considered to be the main reason for the depreciation of the Indian rupee. A number of major banking and financial scams in India have also affected investor confidence. These investors, especially FIIs (Foreign Institutional Investors) have withdrawn over Rs 90000 crore from the Indian stock market. This has led to a decline in the value of the Indian rupee. Other factors affecting the Rupee valuation are the Current account deficit, stock market valuations.

Indian travelers in the US

The United States has been a popular travel destination for Indians for a number of reasons. Many Indians travel to the US to visit their relatives and friends who are settled in the country. Others visit the country for business and sight seeing. More than 1.1 millions Indians visited the US in 2017. The rupee depreciation is likely to only marginally affect those visiting their relatives and friends in the US. However, the number of Indian tourists in US could be adversely affected since all expenses in the US have increased by at least 10%. Hence, some of these tourists could opt for cheaper holidays in Europe which are marketed extensively by travel agents.

Indian students in the United States

Along with the Chinese, the Indians form a large part of the international student community in the US. Many of these Indian students take a student loan in India for their US education. The depreciation in the value of the Indian rupee, means that these students will have to take larger loans for studying abroad. In some cases, the parents are paying for the education expenses of their child in the US. So many students, especially undergraduate students, may opt for cheaper educational options. Hence, Australian college education is marketed aggressively in India at present. Another option, the United Kingdom is traditionally popular in India for higher education due to historical reasons.