Quick Scenarios
Time Horizon
Instant: one-time shock, no growth applied.
5/10/25yr: real GDP growth + annual appreciation compound over horizon. The "instant appreciation" slider is disabled in horizon modes — use "Annual Appreciation Rate" instead.
5/10/25yr: real GDP growth + annual appreciation compound over horizon. The "instant appreciation" slider is disabled in horizon modes — use "Annual Appreciation Rate" instead.
Currency Levers
0%25%50%75%100%
0%1%2%3%4%5%
Economic Variables
2%4%6%8%10%
NoneLowMedHigh
Infrastructure & Reform KEY LEVER
0%25%50%75%Full
17%21%25%30%
Relative Currency Moves
-20%0%+20%
-20%0%+20%
Base: India 2026 est. Nominal GDP ~$4.3T, PPP ~$19.1T, ₹87/$, exports $662B, imports $585B, remittances $130B, external debt $680B.
Exchange Rate
₹87/$
baseline
Nominal GDP
$4.3T
—
Per Capita (Nominal)
$2,966
—
Trade Balance
-$77B
deficit
Global GDP Rank
#4
vs competitors
Nominal vs PPP GDP ($T)
Trade Balance — USD Volume ($B) ✓ J-Curve Modelled
Sector Win / Loss from Appreciation
BASELINE — STATUS QUO
Adjust sliders or pick a scenario to model appreciation impacts.
Import model (corrected): A stronger ₹ lowers the unit price of imports in INR, but this increases USD-denominated import volumes as purchasing power rises. Net USD import bill = price effect (−) + volume demand increase (+). Pass-through coefficient: 70%. Net result: small increase in USD import bill, larger fall in INR cost. This is the empirically observed J-curve initial phase.
Export Revenue by Sector ($B)
Import Bill — USD Volume ($B) ✓ Corrected Direction
Full Trade Data — Before vs After
| Category | Baseline ($B) | New ($B) | Change ($B) | Change % | Note |
|---|
FX Sensitivity by Export Sector
Remittances & Debt — INR vs USD Impact ✓ Corrected
Forecast model (corrected): Instant appreciation and annual appreciation are mutually exclusive. In Instant mode, a one-time FX shock is applied at t=0 with no compounding. In horizon modes, only annual appreciation compounds. Competitor GDPs (US, China, Germany, Japan) also grow at historical rates so rank comparisons remain valid over time.
25-Year Nominal GDP Trajectories ($T) — India vs Competitors
Exchange Rate Projection ₹/$ over 25 Years
Per Capita Nominal Income ($) over 25 Years
Year-by-Year Milestones (Current Scenario)
Productivity Boost
+0%
vs today
Safe Apprec. Ceiling
~0.5%/yr
annual max
Export Diversification
Low
today
Dutch Disease Risk
High
without reform
Hard Currency Status
No
not yet
Infra Completion → Productivity → Safe FX Ceiling
MFG Scale-up: Export Volume & Resilience
Safe Annual Appreciation Ceiling by Infrastructure Stage
SET INFRA SLIDER TO SEE ANALYSIS
Move the Infrastructure Completion % slider in the left panel.
₹ vs Major Currencies after Appreciation
India Trade Exposure by Invoice Currency (%)
India REER Index — Historical & Projected
Historical Precedents — How Peers Managed Appreciation
| Country | Period | Appreciation | Outcome | India Parallel |
|---|---|---|---|---|
| 🇯🇵 Japan | 1971–1985 | +300% | Lost textiles → Gained autos/electronics | Possible if MFG matures |
| 🇰🇷 South Korea | 1980–2000 | +120% | Chaebol innovation drove through it | Needs corporate consolidation |
| 🇳🇱 Netherlands | 1960–1977 | +40% | "Dutch Disease" — gas wealth hurt industry | Risk if IT stays dominant |
| 🇧🇷 Brazil | 2003–2012 | +150% | Commodity boom masked deindustrialization | Risk without diversification |
| 🇨🇭 Switzerland | 1970–2024 | +500% | Premium products/finance absorbed FX cost | India's long-term aspiration |
What was fixed in v2 (vs v1)
✓ FIX 1 — Import direction corrected. v2 models: USD import bill = baseline × (1 + volume_surge × 0.4) × (1 − price_saving × 0.7). Net effect: USD imports rise slightly, but INR cost falls substantially. This reflects the J-curve.
✓ FIX 2 — Debt relief corrected to INR terms. v1 showed debt relief in USD. v2 shows debt relief in INR terms: you need fewer rupees to repay the same dollar debt. Formula: INR saving = ExternalDebt_USD × (BaseRate − NewRate).
✓ FIX 3 — Export formula bounded correctly. v1 could produce exports higher than baseline when competitiveness + infra bonuses exceeded FX drag. v2 caps the infra/MFG boost so it can only reduce the net loss — it cannot flip a loss into a gain beyond real-world plausible bounds (~15% volume uplift max).
✓ FIX 4 — 25yr custom line better defined.v2 uses only the annual rate slider for all horizon projections, cleanly separated.
✓ FIX 5 — Competitor GDPs grow over time. v1 compared India's growing future GDP against static 2026 competitor benchmarks (frozen). v2 projects US (~2.5%/yr), China (~4.5%/yr), Japan (~1%/yr), Germany (~1.5%/yr) forward so rank assessments are time-consistent.
Remaining model assumptions (clearly labelled, directionally valid):
— FX sensitivity coefficients (IT 0.85, textiles 0.75, etc.) are informed estimates, not econometric. Use for direction, not precision.
— Volume surge on imports (0.4 elasticity) is a simplified price elasticity; real elasticities vary by product.
— Productivity-from-infrastructure relationship is structural/directional only.
— All numbers are illustrative of mechanisms, not official projections.
✓ FIX 1 — Import direction corrected. v2 models: USD import bill = baseline × (1 + volume_surge × 0.4) × (1 − price_saving × 0.7). Net effect: USD imports rise slightly, but INR cost falls substantially. This reflects the J-curve.
✓ FIX 2 — Debt relief corrected to INR terms. v1 showed debt relief in USD. v2 shows debt relief in INR terms: you need fewer rupees to repay the same dollar debt. Formula: INR saving = ExternalDebt_USD × (BaseRate − NewRate).
✓ FIX 3 — Export formula bounded correctly. v1 could produce exports higher than baseline when competitiveness + infra bonuses exceeded FX drag. v2 caps the infra/MFG boost so it can only reduce the net loss — it cannot flip a loss into a gain beyond real-world plausible bounds (~15% volume uplift max).
✓ FIX 4 — 25yr custom line better defined.v2 uses only the annual rate slider for all horizon projections, cleanly separated.
✓ FIX 5 — Competitor GDPs grow over time. v1 compared India's growing future GDP against static 2026 competitor benchmarks (frozen). v2 projects US (~2.5%/yr), China (~4.5%/yr), Japan (~1%/yr), Germany (~1.5%/yr) forward so rank assessments are time-consistent.
Remaining model assumptions (clearly labelled, directionally valid):
— FX sensitivity coefficients (IT 0.85, textiles 0.75, etc.) are informed estimates, not econometric. Use for direction, not precision.
— Volume surge on imports (0.4 elasticity) is a simplified price elasticity; real elasticities vary by product.
— Productivity-from-infrastructure relationship is structural/directional only.
— All numbers are illustrative of mechanisms, not official projections.