After working with companies such as Thomas Cook, Centrum Direct, and BookMyForex, Prince Chhabra started his own forex firm less than two years ago. Go Forex Pvt. Ltd’s trading outlet in Gurugram employs six. The business crashed in March as people started cancelling their overseas travel plans and tourists stopped visiting Delhi—even before the lockdown took hold.
“From 15 March, there were no transactions. I don’t know how to pay salaries, rentals. In March, I paid my employees. I might deduct salaries in April because the entire industry is doing that," Chhabra said.
The business of foreign exchange is seasonal. For many forex companies, the April-June period constitutes nearly 40% of the business, as this is the time Indians travel abroad on holidays. A second wave of business starts around November-December when many non-resident Indians travel back to India.
“This quarter has killed us. We did not break even as a company yet. Now, I don’t know how to survive," he said.
The travel industry and its ancillary sectors have been the worst hit amid the covid-19 crisis. Most forex traders now expect 2020 to be a washout.
The Indian foreign exchange market is worth about $60 billion a year. About $21 billion comprises the outbound forex market, while another $26 billion is the inbound pie. The rest comes from remittances.
“We have bad times ahead. We clearly see a bleak future in 2020-21," said Sudarshan Motwani, founder and CEO of online forex marketplace BookMyForex. “The $60 billion market may shrink to $25 billion this year. Inbound travel may still happen later in the year because there are many Indians overseas. Outbound will be the big hurt."
According to Motwani, there are more than 2,000 money changers in India. Only about 4% of them are medium to large firms. The rest are mom-and-pop stores—most of them are likely to wind up.
https://www.livemint.com/news/india/cancelled-trips-damage-60-billion-forex-market-11586448043153.html
2020-04-09 16:04:14Z
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