tag:blogger.com,1999:blog-8726844009873922462.post5266146986794423193..comments2024-03-14T06:10:14.591-07:00Comments on Broadsword by Ajai Shukla - Strategy. Economics. Defence.: Rupee fall jacks up India's arms purchase billBroadswordhttp://www.blogger.com/profile/13076780076240598482noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-8726844009873922462.post-68374676404708762742011-12-26T17:41:05.627-08:002011-12-26T17:41:05.627-08:00Mr Shukla,
This entire article is a joke. I am a ...Mr Shukla,<br /><br />This entire article is a joke. I am a MBA in Finance and work at a major US Bank in structured deals for the last 8+ years. Deals of this scale and nature (6-8 years for total deal closure) have minimal exposure to the prevailing exchange rate. Payments will be spread out based on zillion factors. Rest assured, if the Ministry of Finance is worth its salt, India will NOT PAY A SINGLE DOLLAR for the next one year (probably more). <br /><br />The GoI will issue a firm Letter of Intent/Procurement which will be used by Dassault/BAE to procure financing from multiple agencies. <br /><br />I could go on and on on how the deal could be structured/payment terms and options etc etc. But as per the world of Finance and if there is a shrewd person in the Ministry of Finance handling this (or should i say a honest person), India need NOT pay a single dollar/Euro till the first Rafale/ EF rolls off the assembly line. If there is a person of average IQ, we will make a "goodwill" upfront payment. And if we are suckers like our past PM, we will pay Rs 1000 crores to the Ruskies to develop the SU-30MKI.<br /><br />Note-My point is they can structure the deal to not pay a dime till the first aircraft rolls of the assembly line. But considering that corruption is part of the Indian DNA, I will not be surprised if our political leadership sells our country by entering into a hedge at prevailing exchange rate (which not even a rookie at our Bank will do-but then his DNA is not corrupted)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8726844009873922462.post-46723694692474826112011-12-26T14:42:18.720-08:002011-12-26T14:42:18.720-08:00If you comment that there is no hedging by the MOD...If you comment that there is no hedging by the MOD is correct than this is really irresponsible of them.<br /><br />Every major company and multinational I have advised in my line of work hedges forex. This is a reality and best practice in todays borderless commercial world.<br /><br />At worst, regs permitting, the MOD should have bought US dollars with the inital budgeted amounts when the Rupee climbed. <br /><br />The MOD and GOI needs to get its creaking bureaucratic brains into the 21 century commercial best pratcice to prevent waste and risk after all they are merely trustees of the taxpayer money they are spending.<br /><br />Thanks<br /><br />PHLAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8726844009873922462.post-68884987193880943022011-12-26T13:12:45.800-08:002011-12-26T13:12:45.800-08:00USA and EU both are facing the severe economical c...USA and EU both are facing the severe economical crisis, but comparatively the businessmen have more confidence in dollar than Euro, so dollar is rising in comparison to Euro. Other currencies are getting adjusted as per their individual demands. <br /><br />Rupee is falling consistently in comparison to both the dollar and Euro, so the import for India becomes costlier. At such occasions India shall refrain from the import of full equipment, but shall continue with the import of needed components with the hope that the dollar falls down a day.<br /><br />Now I am afraid that MMRCA will be further delayed and J-20 will arrive earlier. Lol...Mr. Ranoreply@blogger.comtag:blogger.com,1999:blog-8726844009873922462.post-23111995795553763112011-12-25T23:28:46.405-08:002011-12-25T23:28:46.405-08:00What causes this fluctuations..With all the theori...What causes this fluctuations..With all the theories, its like the stock exchange where by it is acknowledged that it sometimes makes no logical sense. There are far too many market players to pull, adjust strings the right way.<br /><br />The US being the largest creditor, yet the USD is well accepted and a currency for international payments.<br />The euro...with all theories, the UK has not joined in, and apart from a few countires contributing it positively, the bulks growth is wither negative or weak.Croatia has just joined in. Really no logical conclusion. It might just be that the euro which was formed to avert a ww2 like situation would just be the cause of it. Theories are falling apart.<br />I say all this to simply highlight the acknowledgement of backdoor players in defence deals and economies. It has always been so in History. Gen Tito added one more dimension, export of thugs and looking after them as long as they contributed back to their motherland in terms of money sent back. But thats is a bit offshoot of the topic here<br /><br />Ever since the news of the deal being finalised, the ruppee has weakened...ever since the finalisatiuon within the fortnight has been added to the news, the rupee slide is ever more angled..<br /><br />One wonders if there is a link to the deal to be signed and the ruppee value at that time....rustomnoreply@blogger.comtag:blogger.com,1999:blog-8726844009873922462.post-58253341118580763592011-12-25T19:07:01.860-08:002011-12-25T19:07:01.860-08:00Yet another reason to indigenise, indigenise, indi...Yet another reason to indigenise, indigenise, indigenise....<br /><br /><br />---SharmishthaAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8726844009873922462.post-83022807958025636672011-12-25T13:41:13.937-08:002011-12-25T13:41:13.937-08:00That is why it is generally said that the projects...That is why it is generally said that the projects and agreements shall not be delayed unnecessarily. Now they have to suffer on many fronts on various accounts.<br /><br />Anyhow we are behind and late in the race of the modern weapons, so our indigenous development of military equipment needs to be hastened with quantum jumps notwithstanding the financial stresses it creates.Mr. Ranoreply@blogger.comtag:blogger.com,1999:blog-8726844009873922462.post-69916871287688094022011-12-25T10:24:30.036-08:002011-12-25T10:24:30.036-08:00Sir,
Payment will not be a one time payment. It wi...Sir,<br />Payment will not be a one time payment. It will be like EMI i.e. in batches. So saying that all $15 billion USD will be given right away is wrong assumption. So even if the decision was to be made earlier, we could not have made must savings. correct me if i am wrongAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8726844009873922462.post-34959474792624435162011-12-25T06:43:20.130-08:002011-12-25T06:43:20.130-08:00Thanks for this article which again highlights the...Thanks for this article which again highlights the incompetence of few for which the entire country will now have to pay. :(Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8726844009873922462.post-18652689205740918742011-12-24T23:59:55.547-08:002011-12-24T23:59:55.547-08:00I had a dream tat u posted FGFA report ....I had a dream tat u posted FGFA report ....Anonymousnoreply@blogger.com