The Indian rupee achieved

The Indian rupee achieved a 26-month high this week and corporate India, far from worrying about its exports, is in confident mood.
Conventional wisdom has it that when a currency begins to strengthen, it starts to hurt exports.
Not in India. Or at least, not just yet.

So far, the only note of caution comes from infotech exporters, who express some alarm at the rupee's non-stop march upwards.
The bullish mood is not surprising, considering the rupee has traditionally depreciated against the dollar by between 3% and 4% every year.
This is the first time it has reversed the trend, gaining nearly 4%.
India's programme of economic reform, which began 12 years ago, is now seen to be having an impact right the way across the economy.
Prices are falling, inflation is in check, exports are booming, the imports bill is coming down and foreign exchange reserves are at an all-time high of more than $81bn.
"In the longer term it's sound for the Indian economy. The rising strength of the Indian rupee will bring our purchasing power up on a par with other currencies," says Ashwani Kakkar, of the money changing company, Thomas Cook.
The appreciation of the rupee is a new phenomenon
Razzak Allana
Good news all around then.
"The only bad news is there's no bad news," says forex expert Jamal Mecklai.
Sanjay Kothari, a leading exporter of finished gemstones and jewellery, is a also happy man.
He told the BBC he wouldn't mind if the value of the Indian rupee rises even further. "It's good for the country, so why should I get worried, " he says.
Exporters worried?
"I expect the rupee to rise for another five years. It can come down to even 38 rupees," adds Jamal Mecklai. (At present it's 46.80 to a dollar)
Razzak Allana, founder of the 300-million dollar Allanasons Exports, says there's no reason to boast, but the strengthening rupee has its own logic.
"The appreciation of the rupee is a new phenomenon, we have never had forex reserves of over 80 billion dollars," he said.
The rupee's non-stop rise in the last couple of years has had little impact on export performance.
Just last year, exports rose by 16.76% in the first 11 months of 2002-2003 (April 2002-February 2003).

So, are Indian exporters not affected at all?
"Our exports are import-depended. Nearly 70% of our raw material is imported from Brazil, Belgium and the UK, " says Sanjay Kothari, who exports gemstones and jewellery.
Gemstones and jewellery accounted for $8 billion of India's exports last year.
Kothari believes they will do even better the next.
Razzak Allana, who exports coffee, oil and processed foods, says it's all down to the Indian farmer's market-savvy pricing strategy.
"The Indian coffee grower, who doesn't know a word of English, would often ask, what's the price in New York, how much in London, and then he would adjust his price to suit the international market.
So, the rupee appreciation doesn't affect anyone of us," says Allana.
Our exports are import-depended. Nearly 70% of our raw material is imported from Brazil, Belgium and the UK
Sanjay Kothari
Experts believe India's sunshine infotech industry is sure to be hit hard.
However, the big boys of Indian IT told BBC Online, they are well prepared to cope.
Infosys, one of the country's most successful infotech companies, said it was expecting that the majority of the growth for next year would come from volume growth.
Analyst Mecklai believes Indian IT is prepared for falling profits.
"They are having troubles with their margins but not with their top lines," he says.
Until recently, companies such as Infosys and Wipro concentrated on their main export market, the US. But now, they've begun targeting Japan and Europe too.
The argument is that any losses faced by a company like Infosys on its dollar income will be compensated by rising earnings from the strengthening euro.
Rupee is climbing
Most analysts attribute the rupee's gains to the weakening dollar. Some predict the rupee will continue to gain, because the dollar will continue to fall, as the US has a large current account deficit and a weakening stockmarket.
But there is another important reason for the rupee's upward mobility - India's current account surplus, which is nearly $3 billion.
It is a remarkable sum, considering the country has frequently been in deficit.
India's balance of payment crisis of 1991 was one factor that triggered sweeping reform and economic liberalisation.
Another important reason for the rupee's rise is the strong growth of infotech exports, which rose by 30% last year.
Experts say interest rates in India are still much higher than in the many Western countries where large Indian diasporic communities are settled.