India’s economy is growing rapidly, but foreign currency management remains important. Zoho founder Sridhar Vembu explained the reason behind this approach.
Prime Minister Narendra Modi recently highlighted India’s 7.8% growth rate. He also encouraged citizens to follow self-reliant practices.
Additionally, PM Modi asked people to avoid unnecessary foreign trips and overseas weddings. He also suggested avoiding gold purchases unless required.
Vembu Explains The Need For Foreign Currency Savings
Sridhar Vembu responded to a user’s post on X about these suggestions. The user questioned why such restrictions exist during strong economic growth.
The user also asked why the stock market remained stable or lower despite GDP growth. Vembu explained that the answer comes from East Asian economies.
According to Vembu, Japan, Taiwan, South Korea and later China faced similar growth phases. These nations focused on rapid development while saving foreign currency.
Energy And Technology Imports Increase With Growth
Vembu said India still depends on imports for energy and technology. Therefore, faster economic expansion can increase the need for these imports.
He explained that rising growth requires more energy and technology inputs. However, these areas currently depend heavily on external sources.
Moreover, exports become important because of this dependence. Vembu said Indian export industries also rely on imported technology.
He added that India needs higher exports to balance import dependence. Advanced technology inputs like precision machines, materials, CPUs, GPUs and software remain necessary.
Technology Independence Requires Decades Of Effort
Vembu said reducing dependence on advanced technology cannot happen quickly. He explained that achieving equality in these sectors takes decades.
Furthermore, he pointed towards Japan, Taiwan, South Korea and China as examples. These countries reduced dependence on foreign resources while expanding their economies.
According to Vembu, India has started well but needs more time. He said the government is following a similar approach.
India’s Economy Compared With A Growing Company
Vembu compared India’s current position with a rapidly expanding company. Such a company saves capital to manage future growth.
He explained that India may not need forex savings once it masters advanced technologies. Renewable energy technology developed domestically could also reduce dependence.
Therefore, India needs to preserve foreign currency for development investments. Vembu shared this view after PM Modi’s appeal for more “Swadeshi” choices.
The appeal included reducing foreign travel, avoiding destination weddings abroad and limiting unnecessary gold purchases.
