Noted economist Nouriel Roubini doesn’t see weakness in rupee as a negative for India’s economy. He said that the gradually falling currency may not lead to imported inflation because some of the energy imports are from Russia at discounted prices and benefits of slightly weaker currency (in terms of export boost) may outperform concerns of imported inflation.
Roubini, professor emeritus at Stern School of Business, New York, spoke to ETNOW on India’s growth potential and opportunities due to capital moving out of China.
He said friendshoring is a huge opportunity for India as it emerges as an alternative for global capital flowing out of China. He lauded India for policy choices like GST that have unified Indian market and reduced friction and reduced logistics cost.
Roubini said India is on the right track in creating physical infrastructure to capture share of global capital flowing out of China.
On economic growth, he said India has the potential to grow at more than 7 percent if it continues on the economic reforms path.
The global economist thinks that there will be a dedollarisation over a period of time due to falling share of economic heft of US globally and geostrategic reasons. He feels the Indian rupee could become one of the global reserve currencies over a period of time.
The RBI had last year in July allowed trade in rupee due to challenges thrown by the Russia-Ukraine war.
“I see a lot of traction (in rupee trade settlement). Going forward, the kind of disruption due to the (Russia-Ukraine) war which have been experienced all over, I think countries are looking at alternative modes of payment,” RBI Governor Shaktikanta Das had said in November.
