The abysmal condition that the Rupee is in these days is no surprise. The Indian currency just plunged to an all-time low of Rs 73.74 against the United States Dollar. While we’re sure the government is taking adequate steps to combat the problem, one of the proposed ‘solutions’ could end up having a massive impact on the sales of luxury items like Apple’s iPhones.
According to Zee Business, an advisor of Prime Minister Narendra Modi has suggested banning import of luxury items to control the Current Account Deficit (CAD), in order to stabilize the Rupee. The advisor has reportedly said that disallowing import of luxury products altogether is a much better solution than raising interest rate on them. If this suggestion is indeed agreed upon, Apple could have a very hard time selling its ‘luxurious’ iPhones in India, especially the recently-launched iPhone XR, iPhone XS, and iPhone XS Max.
“We need to actively send signals to de-incentive or discourage increase in consumption of what I describe as explicit luxuries,” Rathin Roy, a member of Prime Minister’s Economic Advisory Council, was quoted in the Zee Business report, as saying in an interview to Bloomberg.
Roy reported added, “Imports of mobile phones such as iPhones or spending on services such as higher education overseas has gone up.”
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While it’s impossible to comment on how much this solution will help in stabilizing the Rupee, the PM’s advisor is right about calling iPhones ‘luxury items’. With the top-of-the-line iPhone XS Max priced at an insane Rs 144,900, what else could they be? Whether or not this suggested ban comes into effect, remains to be seen.