Executives said they may have to push back the next wave of price hikes as early as this month despite the latest price hike undertaken in late March or April, with the rupee’s fall affecting their immediate dispatch of goods entering the country.
Although automakers are also similarly affected, industry executives have said they will absorb the impact now.
President of electronics company Haier India, Satish NS, said pressure on input costs had become higher with the depreciation of the rupee. He said the company would raise prices another 3-5% from this month after last month’s 3% increase.
“Already prices for raw materials like aluminum, steel and plastic are up 8-10% in the last two months and with the depreciation of the rupee we need to close the gap. Margins of almost all businesses are bleeding badly and with the proposed hike we will be at break-even,” he said.
The CEO of smartphone and electronics maker Realme India, Madhav Sheth, said the value of the Indian currency has been staggering for some time. While the company expects the rupiah’s depreciation to have an impact on the prices of its products, it is working on a strategy to minimize additional costs for consumers, he said.
Godrej Appliances business manager Kamal Nandi said the company will take into account the rupiah’s impact on its prices with the next delivery in June.
The rupee hit an all-time low against the dollar on Monday and is holding above ₹77 to the dollar, shocking consumer goods makers who had previously priced their prices at an exchange rate of ₹75 to the dollar. Economists expect the local currency to continue to depreciate.
IDC India research director Navkendar Singh says smartphone and computer makers won’t absorb the rupiah’s impact and will raise prices by 3-5% from this month .
“Demand has declined since the last quarter due to inflation and consumers are postponing their smartphone replacement cycle. This price hike will further impact demand,” he said.
The prices of basic necessities will also firm up, especially imported ones or have a greater share of imported raw materials.
“We are dependent on imports of raw materials including stevia, aspartame and palm oil, as well as flavors and fragrances. While a weaker rupee is not a huge challenge, it comes at a at a time when we are already seeing an impact on operating costs due to commodity price inflation, so the devaluation of the rupee will only add to the overall burden,” said Tarun Arora, Managing Director of
which sells Complan, SugarFree and Nutralite.
Angshu Mallick, Managing Director of
which sells the Fortune brand of edible oils, said that while edible oil prices fell by $100 a ton globally, which could have been an opportunity to cut prices, the impact of depreciation of the rupee is around $50 per ton. opportunity almost canceled.