F&V, high end luxury items to be affected by demonetization

According to noted rating and research agency Ind-Ra, the sudden announcement by the government to make the currency notes of INR500 and INR1,000 invalid to impact some specific segments of the market in a major way in the near run. According to an analysis furnished by the agency, “ the impact of this move will be felt across sectors with differing intensities and for a different period of time.”  fruitsThe report says that there would be a major contraction in the cash economy affecting segments like agriculture trade. “Small and marginal farmers in the fruits and vegetable category typically require off-loading of their produce in the local Mandi in cash and could see an immediate impact. A sudden demonetisation will adversely impact this segment of the economy and it will witness immediate contraction, though the impact will diminish over time.”
Ind-Ra also expects the impact on high end fashion retail and luxury goods to be more pronounced as discretionary demand in this segment will be curtailed. Ind-Ra analysis underlines that demand across the retail sub-segments will shift to the organised segment over the medium term.

Spread the love

Related posts

Leave a Comment