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Indians wake up to consumerism - Views on News from Equitymaster
 
 
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  • May 7, 2009

    Indians wake up to consumerism

    Indian consumer far from being consumed
    Just like the US, the Indian consumer too plays a very important role in propping up its economy. However, the similarity might just end here. While the US consumer is more or less broke and has also borrowed to the hilt, the Indian consumer is showing no signs of any such fatigue from over-spending.

    As per a leading financial daily, sales of discretionary items such as watches and TV are holding up quite well in India despite the economic slowdown. The report goes on to cite the success of the recently introduced high-priced collection of Titan Industries, India's largest watch maker. The response to the product has taken even the company by surprise.

    Similar trends were being observed in other categories like electronic goods. And it is not just the metros. Even Tier-2, 3 and 4 towns are warming up to the concept of consumer durables and contributing to growth. Thus, while the country's government may be broke and may have faced credit downgrades, its consumers are showing little signs, if any, of the economic slowdown.

    Asian monetary fund comes full circle
    While there could be a debate on whether the US dollar will retain its status as the world's reserve currency, as far as US influence on global economic matters is concerned, it is definitely on the wane. Further proof of the same came few days back when ASEAN (Association of South East Asian Nations) and three of the biggest economies in Asia - China, Japan and South Korea - came together to form an Asian Monetary Fund. Interesting to note that a similar attempt to form the fund was made way back in 1997-98 in the aftermath of the Asian financial crisis. However, the idea was nipped in the bud by the US as it argued that such a fund would weaken the IMF and in turn, loosen America's grip on Asian financial matters.

    This time around though, things are drastically different. For one, it is not the Asian region that has created the current financial crisis and hence the US has little moral ground to preach other nations. Secondly, courtesy humungous economic growth in recent years, China has become much more ambitious and wants to play a bigger role in shaping global economic policy. Surprisingly, despite being the third largest Asian economy, India has been kept out of the equation. The blame seems to once again lie at the door of its anxious neighbor.

     

     

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