Abstract
Exchange rate is parameter to measure the International competition between the different countries. It is also known as index of competitiveness of currency of any country and an inverse relationship between this index and competitiveness exists. An exchange rate has two important component, the domestic currency and a foreign currency and it can be represent by the directly or indirectly. In the first way the price of a unit foreign currency is represent in terms of the domestic currency. In indirect way, the price of a unit of domestic currency is representing in terms of the foreign currency. The foreign exchange market is the place where the currency of one country is exchanged for that another country where the rate of exchange is determined. The Indian pharmaceutical industry currently occupies the top position among science based industries. Indian pharma industry is organized sector and it has to be total market value of 4.5 US billion dollars. It growth rate is near about 8% to10% per annum. The Indian pharmaceutical sector is highly structured with Approx 20,000 units. It market capitalization is expected to grow to US$ 85 billion by the year 2020. The purpose of this paper is to investigate the exchange rate exposure of pharmaceutical Industry in india.For this stock price of selected companies (Yearly and exchange rate data) are taken from the government websites. The time periods are taken from 2003 to 2013. The result indicate that weaken rupee has significant positive relationship with pharmaceutical sector.
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