From ₹83 in early 2024 to ₹85.53 in March 2025, and now past ₹95 in May 2026 — the Indian rupee's depreciation has accelerated into territory that demands attention. The currency touched an all-time low of ₹95.33 per dollar on April 30, 2026, and has fallen approximately 12% in the past twelve months, well above its typical annual depreciation of 3–4%. In percentage terms, the slide is almost identical to the 9.6% drop of FY 2013–14, reviving comparisons to the era when Morgan Stanley labelled India one of the "Fragile Five" emerging market economies.
The drivers this time are distinct but cumulative. India's crude oil import bill has surged with global oil prices. Foreign Portfolio Investor (FPI) outflows — estimated at $17–18 billion over the depreciation cycle — have added dollar-selling pressure. US tariff uncertainty weighed on export-oriented sectors and eroded confidence in bilateral trade stability. The current account deficit (CAD) has widened to an estimated $40–50 billion wider than recent years. And the narrowing US-India interest rate differential has reduced the carry trade incentive for holding rupee-denominated assets.
The Reserve Bank of India has not been passive. With FX reserves broadly maintained in the $640–700 billion range through this period, the RBI has leaned against acute volatility — using spot market intervention and forward contracts (maintaining a USD 65 billion short forward book) to smooth the slide without targeting a specific exchange rate level. Governor Shaktikanta Das has been clear: "We allow markets to determine prices. We believe markets, especially in the long run, are very efficient."
Who benefits? IT majors like TCS, Infosys, Wipro, and HCL Tech — whose revenues are in dollars but whose costs are predominantly in rupees — see margin expansion with every rupee decline. Pharma exporters including Sun Pharma, Dr Reddy's, and Cipla gain similarly. NRI remittances convert to more rupees, supporting consumption in origin states. Who loses? Energy importers, manufacturers dependent on imported components, students paying foreign tuition, and any Indian entity servicing foreign-currency debt. The base case from most institutions — including MUFG and Bank of America — is stabilisation in the ₹92–95 range, with recovery possible if the US-India trade deal hardens and oil prices soften.
