What is rupee appreciation??

Appreciating Rupee means that now the Dollar is now cheaper than what it used to be earlier (from $1~50 Rs, now to 40 Rs.), in other words you can buy more from the international market spending the same amount of Rupees. There are very direct effects of the appreciating Rupee in both national and international scenarios.To put it simply we must consider the whole situations through two points of view: Import and ExportImport: When you import (buy from foreign markets) goods, you have to pay in dollars. India's chief import is crude oil. Suppose a barrel of oil costs $100, as per earlier rates a company would have to pay aout 4800 rupees($1=48 Rs) to buy a barrel, now can buy the same for 4000 Rs ($1=40 Rs.). so oil companies are the biggest gainers from the appreciating rupee. They are now getting oil at reduced prices but selling them to the customers at old rates, hence increasing their profits.Export: When you sell goods/services in foreign market you get payed in dollars. A lot of companies that have been asking the govt. and RBI for control of the appreciating rupee, are export driven companies like big IT cos. who export software solutions and provide out-sourcing services. There are many others too like garment exporters and even automotive companies. the scene here is that, supposing a BPO company charged $100 for its services, it would be getting payed an equavalent amount to Rs 4800 as per old exchange rates, but because of the appreciating rupee, it now gets payed Rs 4000, and as the market gets increasingly competative the company cannot increase the fee it charges the client to $120 to cover this loss, as it risks losing the client to some other company. Garment exporters are hit even stronger as they mostly survive on large dedicated orders and charging more to cover their losses can even result in cancellation of large orders and massive loss to a garment exporter. Hope this explains...