I am a master in India

Chapter 391 Pretend to be classy
In early July 1997, the Thai baht financial system collapsed, and a large amount of capital fled the country.

The storm quickly swept across Southeast Asia, with South Korea and Indonesia experiencing severe financial shocks.

The causes and consequences need no further explanation; in short, Asian countries experienced significant currency depreciation and a sharp decline in export trade.

Remarkably, apart from the University of Tokyo, India also emerged almost unscathed from this financial crisis.

The reasons can be broadly categorized into two aspects: first, foreign exchange controls; and second, limited foreign trade.

Despite the rupee's unpopularity in the international currency market, the Indian government has always maintained control over exchange rate fluctuations.

If things start to go wrong, we will intervene and take a strong stance.

Of course, the most important reason is that the government has not opened up the financial market. Foreign capital coming here is not only unlikely to cause trouble, but it is also questionable whether it can leave.

"Earn money in India, spend it in India"—this is a world-famous saying, and it applies equally to everyone.

It's impossible for foreign capital to control shares like in Thailand. India has always been the one exploiting foreign investors, not the other way around.

At this time, India's economy was mostly focused on meeting domestic demand, with a low dependence on foreign trade and exports accounting for less than 10% of GDP.

This is fundamentally different from countries like Thailand and Malaysia, which heavily rely on foreign investment and exports.

To put it bluntly, it's not open enough, and foreign investment can't participate deeply in India's domestic economy.

However, there was still some impact. In order to buffer external shocks and avoid depleting foreign exchange reserves, the rupee depreciated by about 15% under the intervention of the Indian government.

Currently, 1 US dollar can be exchanged for 45 rupees, increasing the pressure to import raw materials.

Some export-oriented companies have encountered difficulties in their business, and some have gone bankrupt.

Suer Electric Appliances has also clearly felt this chill, and its share of overseas trade has been growing steadily over the past two years.

However, since the financial crisis broke out a month ago, overseas orders have been cut one after another.

Although Suer Electric's main trading partners are the Persian Gulf countries and Africa, the crisis has inevitably begun to affect the world.

Previously, we could export 700,000 to 800,000 units of various home appliances every month, but now it has returned to the level at the beginning of last year, which is about 500,000 units.

This has already had a very significant impact on profits.

But Ron wasn't in a hurry; there was no point in being anxious.

This financial crisis, which has swept across multiple countries, is an act of God and is beyond the control of any individual.

Instead of rushing to Gujarat or Mumbai, he came to New Delhi first.

He received a call from the Industrial Bank in Mumbai, indicating that it would be much harder for him to transfer his money abroad quietly in the future.

The financial crisis taught the State Bank of India a lesson, and they began to strengthen regulations and tighten channels for capital transfers.

In the past few years, with the leniency of the president of the Industrial Bank of Mumbai, Ron gradually transferred all of his slush fund overseas.

He has multiple international bank accounts with accumulated deposits of up to $2.5 billion.

The income from Suer Electric Appliances and the cement plant over the past few years has all come from here. He had the foresight to know that the depreciation of the rupee was an inevitable trend.

So, in order to preserve its value, all the excess cash was converted into US dollars.

India has 20 billion rupees in its domestic accounts for working capital purposes.

Investment, construction projects, and so on all require a certain amount of cash flow.

Now that banks are strengthening their supervision, it will be difficult for him to get his money out of the country.

Just then, Ron's various businesses began to enter their harvest period: the port of Chennai was about to open, the coal mine in Danbad was being mined, and the factory in Kolkata was completed.
With the booming success of Suer Electric and the ever-expanding cement plant, if it weren't for the financial crisis, the monthly profits alone could have reached around 15 billion rupees by the end of the year.

If we don't exchange this money for US dollars, are we just waiting for it to depreciate?

He had certainly considered increasing investment to rationally allocate his assets, but after thinking it over, there were no good opportunities in India at the moment.

Is there a legal way to convert rupees in the company's account into US dollars?

Yes, a letter of guarantee!
This is a financial instrument unique to India; essentially, it's a document given to you by a state-owned bank.

With this document, you can obtain credit from foreign banks.

To put it simply, it's government backing, allowing companies to legally raise foreign exchange.

The advantage is that there are no huge exchange fees, and the official exchange rate avoids the high fees charged by the black market.

Because this method of exchanging foreign currency is relatively cost-effective, whether it is US dollars or British pounds, many companies adopt the practice of "letters of guarantee".

However, to obtain a guarantee letter, collateral must be left behind.

It could be a portion of the foreign currency you borrow, or cash such as rupees.

However, the Indian government has limited foreign exchange reserves, and the amount of US dollars that can be exchanged for the guarantee is also limited.

Giants like Suer Electric only have an annual budget of $100 million.

That's too little. Suer Electric's monthly profit is more than that.

Ron came to New Delhi to meet with a high-ranking official in a banking department. He didn't need a guarantee letter; he just wanted his money to be transferred out smoothly.

That minister had a peculiar hobby: he loved cigars and enjoyed collecting all sorts of them.

Finding cigars in a place like New Delhi isn't difficult, but shops that offer a full range of cigars are rare.

Ron had to make inquiries to find a young man named Manish, who was one of India's two major cigarette importers.

Manish is optimistic, handsome, energetic, and tactful, which makes his cigarette business very successful.

His products are sold in hotels, bars and clubs, and sell well not only in major cities like Delhi, but also in many smaller cities.

Many people called him the "ideal candidate," a title Manish was quite proud of.

However, he does use various methods to meet the needs of his customers. For example, he holds several gatherings every month for customers in Delhi.

The parties are usually sponsored by liquor companies, where men sit around leather sofas, enjoying cigarettes and chatting about their smoking techniques. Others simply puff away, and Manish provides them with a comfortable and private setting.

He also offers delivery services for business celebrations and wedding parties, and provides customers with advice on which type of cigarettes are suitable for which type of guests.

When Ron got married, many of the high-end cigarettes and cigars were provided by Manish.

His shop in Delhi is called "Castro Cigarettes," very Cuban.

Manish was taken aback when Ron walked in. Fortunately, his client was wealthy and influential, so he didn't panic too much.

"Mr. Suer, just have your staff call whatever you need, and we guarantee delivery within an hour."

“It wasn’t me who smoked, it was someone else.” Ron waved his hand, indicating that there was no need to rush to entertain him. “But I am a little curious about this place.”

"Please feel free to look around, and ask me anything you'd like to know." Manish followed closely beside him.

The two sat at the counter and chatted. Besides the waiters, there was only one Mizo woman working there. She was from northeastern India, dressed in a suit, and looked very capable.

She bought two cappuccinos from the nearby Passi restaurant and then retreated to the back room.

Manish introduced Ron to the various strange and unusual cigarettes in his shop, and customers gradually began to arrive.

A woman adorned with jewels was helping a short, stout man. A maid was pushing a stroller, following behind the noblewoman.

Behind them were large floor-to-ceiling windows, and next to the door was a temperature-controlled room where some cigarettes and cigars required special storage.

Cigarettes are displayed in the shop windows on the outside wall, information about cigarette enthusiasts is displayed on one side, and customer lockers are on the other side, each containing a customer's treasured items.

This is a bit like a casual izakaya where customers can store their own alcohol at the store.

Manish said that the most expensive cigarettes locked in the customer's locker were called "Cohiba," which came in a box of five and sold for 30,000 rupees each.

But this customer never smokes these cigarettes; the pack is a gift for bureaucrats and politicians who are beneficial to his business.

Ron noticed from this detail that Manish's cigarette shop had a lot of personality and that this approach was very attractive to customers.

To display one's treasured collection in a shop window for others to admire without revealing one's name.

This way of showing off is very classy.

"Whose locker is that?" Ron gestured with his chin toward the "Cohiba" from before.

“Mr. Sur, this…” Manish was in a dilemma.

Ron noticed that Manish seemed a little nervous when the mystery customer was mentioned.

Needless to say, this is someone important, at least someone that Manish can't afford to offend.

"Don't worry, I won't make things difficult for you," Ron reassured him.

"If you need it, Suer, the store also has the same Cohiba, which is from my personal collection."

"No, it's that other people's things that make your heart race the most, aren't they?"

Tsk, that sounds a bit like Cao Cao's words.

After much deliberation, Manish still softly uttered a name.

Compared to Mr. Sue, that anonymous customer seems to be ranked a step back.

Ron nodded; unsurprisingly, it was some powerful figure in New Delhi.

"Tell me about the others too, the most expensive cigars."

"Huh?" Manish stared in astonishment at the shop window.

“Dude, like I just said, I guarantee they won’t give you any trouble,” Ron reassured him with a smile.

Selling once is the same as selling twice, so it doesn't seem to make a difference.

Manish went so far as to tell Ron about all the customers behind the shop window and shared many stories with him.

His main job is to gain the trust of customers, and he is very good at it.

Manish said that haggling desperately for a 10% discount is in the nature of all the wealthy.

Yes, they are clearly very rich, but when it comes to business, they still reveal their cunning and greedy side, even when it's just buying a pack of cigarettes.

When some people are short of funds, they ask to use credit cards. Some Sikhs, unafraid of religious taboos, secretly smuggle cigarettes from him.

Some people give cigarettes to their friends, treating them like swindlers, hypocrites, and criminals. Others come here to chat with Manish, hoping to gain his approval of their chosen mistresses and prostitutes.

It's like a treatment room in a private clinic, where Manish listens to everyone's conversations. He himself never smokes in public, so his clients don't feel pressured.

“They speak loudly and are arrogant because they have no sense of how much money they’ve made. They don’t know who they are. These people generally have very poor self-control,” Manish said. “These people are usually very unfriendly. They panic when they realize they have to go through a second door to reach the temperature-controlled area. They’re embarrassed because they don’t know how to preserve cigars. When they finally get in, they slam the door shut.”

This guy is probably addicted to gossiping about rich people behind their backs; he just can't stop talking.

It wasn't until Ron tilted his head at Anil that he gradually quieted down.

Anil took out his phone and called each of the customers behind the shop window.

Manish was terrified and stared at Ron in horror.

About ten minutes later, Anil nodded in this direction.

"Okay, everyone behind this shop window agrees that I can have any of their cigarettes."

“This…” Manish was speechless.

Just then, the sound of a car engine came from outside. Ron glanced at it and laughed.

"The person I've been waiting for has arrived. Are you ready with your story?"

(End of this chapter)