What has the US has that we don't? Dollars.

The government is worried about Indian exports which have been falling for 13 months. In December exports fell by 14.75% to $22.3 billion while imports fell by 3.9% to $33.9 billion, giving a trade deficit of $11.7 billion. Since anything we buy from other countries have to be paid for in dollars it means that we have to earn in dollars from other countries, through exports. The shortfall is made up by remittances sent by people of Indian origin living overseas and by money invested in India by Foreign Institutional Investors, or FIIs. FIIs invested a total of $89.5 billion in 2014-15, of which $57.2 billion was in debt and $32.3 billion was in shares. FII investment is welcome but dangerous because it can flee suddenly, causing a collapse in the value of the currency, as it did in the East Asian crisis of 1998. " The two major reasons behind declining exports are - falling crude prices and the Indian rupee, which has not depreciated as much as other currencies have. This has made exports from India less competitive," said an Additional Secretary at the Commerce Ministry." A fundamental magic fix to the falling exports is to devalue your currency, which traditionally economies have done in the past, Japan did it, China is doing it, Korea has done it." Exactly. So why is the RBI not allowing the rupee to depreciate like all other countries, including the EU? Because all these countries have very low inflation rates, while our retail inflation is at 5.61%. If the rupee falls prices of imports, especially fuel, will jump and add to inflation. If inflation goes up the RBI will have to increase interest rate, instead of reducing it as other countries have done, and this will hurt the construction industry, which provides employment to 35 million people and is the third highest in Asia in terms of spending. Politicians and civil servants have most of their black money in real estate so they do not want prices to fall. Apart from commodities, such as iron ore, textiles and gems and jewellery India exports automobiles, capital goods and pharmaceuticals. Instead of concentrating on the US and Europe we should be trading with Africa which is straight across the Indian Ocean and, round the tip of South Africa, straight across the Atlantic with South America. Perhaps the most important requirement for robust exports is to maintain the highest quality at the lowest possible price. That needs very hard work and low taxes. The government cannot lower taxes because it has to finance hundreds of handouts and still keep the fiscal deficit under control. India has 1.3 billion people so our manufacturers have a huge market to sell whatever shoddy products they make, proudly named as 'jugaad'. 40% of all generic drugs sold in the US have been made in India yet the FDA in the US has to write warning letters to our companies to maintain standards. The US had a trade deficit of $531.5 billion in 2015. But the US can print dollars and we cannot. Therein lies the difference.