HSBC said in a research note that rupee weakness has not materially benefited
Indian exporters because high tariffs and domestic manufacturing gaps blunt the
currency advantage. Analyst Pranjul Bhandari said the effect is concentrated in
higher-tech exports—machinery and electronics—while mid-tech goods such as
textiles, footwear and plastics show little response. India is losing market
share in intermediate-goods exports and many final products, notably mobile
phones, depend on imported components. Bhandari added that India’s tariffs on
many goods exceed peers and that high import duties create an inverted tariff
structure for intermediates, suppressing manufacturing and offsetting gains from
currency depreciation.
