India seventh cheapest place to buy an iPad

The rupee has fallen close to 14 percent so far this year against the US dollar, making the Indian currency among the worst performing in the emerging market pack. Despite the rupee's sharp fall, India remains one of the cheapest places to buy an iPad, says a study. Has the rupee overshoot its true value?

According to CommSec, a unit of Australia's Commonwealth Bank, it costs $512.61 to buy an iPad Retina 16GB WiFi tablet in India, even lower than what is costs in US (California: $546.91).

In a compilation of iPad prices in 48 countries, CommSec found that India remains the seventh cheapest place to buy an iPad. Consumers in Argentina ($1094) pay the most globally for an iPad, while Malaysia ($473.77) is the cheapest place to buy the tablet.

CommSec comes out with an iPad index to monitor whether currencies are valued appropriately though the price of goods in a particular country depend on a number of factors like import policy, freight costs and local taxes among others.

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The iPad index is a way of measuring purchasing power parity - the rate at which the currency of one country would have to be converted into that of another country to buy the same amount of goods and services in each country. Craig James, chief economist at CommSec, says, "The iPad index operates the same way as the Economist magazine's Big Mac index. It is based on purchasing power parity. The iPad index is an interesting way to look at exchange rates."

Based on the iPad prices at least, the rupee certainly looks undervalued.