💱 How Currency Exchange Rates Affect Your Export Profits

When you are an exporter in India, your profit does not only rely on your cost of product or your shipping but also on the exchange rate. A minor variation in foreign exchange (forex) rates will either increase your profit or reduce your margins significantly.

In this article, we will show how the exchange rates influence exports and give some simple tips on how to secure your income.

❓ What Is the Currency Exchange Rate?

It is the price of a currency on another. For example:

1 dollar = 83.10 INR (June 2025)

And assuming that the rate remains the same, you will get 831,000 rupees when you export the goods worth 10,000 dollars. However, when the rate goes up to 80, your amount becomes 800,000 80 = 31,000 loss just due to the exchange rate.

❌ Why Exchange Rate Risk Matters to Exporters

The changes in currency rates are as a result of:

• Market conditions in the world
• Inflation
• Interest rates
• Political stability
• Decisions made by central banks

A 12 move of 122 or 22 may cause a devastating effect on your pricing and profits, particularly in large-volume exports.

✅ Tips to Manage Currency Risk in 2025

1. Invoice in Indian Rupees (INR)

Preferably, make buyers pay using INR. It eliminates the forex risk but can decrease the interest of the buyers.

2. Use Forward Contracts

Request a forward contract at your bank to fix today exchange rate on a future payment.

3. Diversify Markets

Make sure you target buyers across a variety of countries, thus you are not relying on a single currency.

4. Keep Payment Cycles Short

The quicker payments minimize the timing of the currency.

5. Use a Forex Risk Calculator

Price planning with currency risk calculator. Change your profit levels.

📊 Example Scenario:

Let’s say your cost is ₹700,000, and you invoice $10,000.

• If $1 = ₹83 → You earn ₹830,000 → Profit = ₹130,000

• If $1 = ₹80 → You earn ₹800,000 → Profit = ₹100,000`

You lose ₹30,000 due to currency dip. That’s 23% of your profit!

📞 Final Advice

• You should never forget to monitor real time exchange rates

• Take advantage of banking applications and forex applications
• Talk to your bank regarding a hedge solution
• The currency strategy is highly connected to export profits in 2025. Know, and be smart.

Need help calculating profit based on forex rate? Visit: www.vskglobaltrade.co.in
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Published by VSK Global Trade – Helping Exporters Maximize Profits Worldwide.