The value of India’s currency has reached its lowest value ever recorded (92 rupees for every dollar), and as of January 23rd has seen some strengthening back to 91.88 rupees. This continued decline has begun to impact families, businesses, and students as the prices of many everyday items have increased.
This ongoing depreciation of the rupee is attributed to many factors, including foreign investors selling their holdings in Indian markets; weak domestic stock market performance due to global economic concerns; and the resulting capital flight towards the stronger US dollar. The rupee depreciation has been approximately 2% thus far in January and nearly 5% over the last year, demonstrating that there is continuing downward pressure on the currency.
Imports Become More Expensive
The weakening of the Indian Rupee means that it will cost Indians more rupees to buy the same amount of crude oil that is priced in US dollars, which raises the cost of importing crude oil and is a concern for India as 85% of India’s crude oil consumption comes from imports. When crude oil prices rise, so do gasoline, diesel, and transportation costs, and as a result, prices of food and other daily items increase.
In addition to crude oil, India also imports electronics, coal, chemicals, machinery, fertilizer, gold, and edible oils. Thus, the rising price of crude oil will lead to increasing prices for products such as mobile phones, home appliances, cars, and electronic devices.
Foreign Education and Travel Hit Hard
International students will not only be burdened by rising costs I.E Tuition, Living & Accommodation but with everything paid on an annual basis they now have to exchange more funds from Indian Rupee to purchase USD, which ultimately will lead to higher overall expenditures. Furthermore, flights and travel have also increased as more conversions of INR -> USD are needed to pay for airfare, lodging, and other travelling costs.
A Small Relief for Some
Not everyone loses from a weaker rupee. Non-resident Indians (NRIs) benefit because money sent home converts into more rupees. This boosts remittances and supports many families.
Exporters See Mixed Impact
Exporters generally gain when the rupee weakens, as their goods become cheaper and more competitive globally. They also earn more rupees for every dollar received.
However, sectors that rely heavily on imported raw materials — such as electronics, gems, and jewellery — may see profits reduced due to higher costs. Industries with lower import dependence, like textiles, may benefit more.
The Road Ahead
India’s imports recently rose to $63.55 billion, widening the trade deficit. Experts suggest that policymakers must carefully balance growth and inflation, while improving trade and currency strategies to protect the economy from further shocks.
For now, the falling rupee means one thing for most Indians: higher costs at home and abroad.