The recent depreciation of the Indian rupee, which fell to a record low of 88.73 against the US dollar, is expected to provide a short-term boost to the country’s exporters. A weaker rupee makes Indian products more price-competitive in international markets. This decline was driven by a sustained outflow of foreign funds, partly due to a steep hike in the US H-1B visa fee, which is expected to negatively impact Indian IT services exports.
While exporters stand to benefit by receiving more rupees for their dollar-denominated sales , the depreciation poses significant challenges for importers. Import-dependent sectors such as gems and jewellery, petroleum, and electronics may experience higher input costs. A depreciating rupee also makes imports of goods like crude oil, electronic items, and even services such as overseas education and foreign travel more expensive. India is particularly vulnerable to this, as it depends on foreign oil for 85% of its fuel needs.
Despite the volatility, which one expert noted is not good for either exporters or importers , India’s merchandise exports showed resilience, rising by 6.72% to $35.1 billion in August. Over the period of April-August 2025-26, exports grew to $184.13 billion, while imports also rose by 2.13% to $306.52 billion. This indicates that while the currency fluctuations are impactful, the overall trade volume continues to grow.