How Long Can India Tolerate Rupee’s Fall

The Indian rupee’s steady fall against the dollar has become one of the defining economic stories of late 2025. The slide reflects a mix of global and domestic pressures- foreign investors pulling money out of Indian markets, a widening trade deficit, and uncertainty around U.S. trade policy. As the rupee weakens, imports such as oil, electronics, and machinery become more expensive, feeding inflation and raising everyday costs for households. At the same time, exporters in IT services, textiles, and pharmaceuticals find their products more competitive abroad, which can support growth in those sectors. Tourism inside India benefits as foreign visitors see greater value, while overseas remittances sent by Indians gain more local purchasing power. Yet the downside is heavy too—government and corporate debt denominated in dollars becomes costlier, and investor confidence can erode, leading to capital outflows. The rupee’s decline is therefore a double‑edged sword, offering opportunities for some while straining others.