What are the significant impacts on India?

Though there aren’t much long term impacts on the country like India which has noted a growth rate of ~8%, there are still some glitches which the Reserve Bank of India and government has to work on. As it is speculated that Euro Zone and Britain are also about to follow the same fashion of increasing the interest rates, yes these might be the immediate effects on the Indian economy. 1) The Dollar becomes strong as demand rises So once the investors started taking back their investments from the Indian markets the demand for dollar will be increased and the rupee becomes week. This happens because as the money (dollar) inflow is reduced due to increased interest rates in US and also individuals who invest in the outside markets will now choose FD’s and SIP’s in US as the government would offer good interest rates. This scarcity will be a problem for the country like India whose imports are more than the exports. India imports 80% of the crude oil where it pays in dollars. So as the dollars are now became scarce we need to buy the dollar for weaker rupees. This would help the IT industries as they can get good profits but on the long term and new projects may come demanding for less quotes and billing. 2) Decrease in the forex reserves Every country has the forex reserves to manage and deal with the exports current account deficiency whenever needed. As the demand for dollar rises and the rupee value falls down, Reserve Bank should force itself to sell the dollars it is holding for less rupees to keep the rupee stronger and arrest the fall of rupee. This would lead in shrunk of the forex reserve of the country. 3) Inflation As the import expenditure is increased the end user of the product should now bare the affect. India being the biggest fuel importer would definitely now increase the fuel prices and this will eventually affects all the other goods commodities as transportation charges are hiked because of increase in the fuel charges. This is a cycle and will affect each and every individual. 4) A big impact on startup culture As the money is not surplus, investors will now not show any interest to invest in the startups of the country. This would be a big setback for the startup culture in India which is like a backbone to the new government initiation “Make in India”.