Rupee Falls Below 92: What Becomes Costlier and Who Benefits

The rupee’s decline to a historic low of 92 against the US dollar on January 23 is predicted to increase inflationary pressures and drive up the price of imports including crude oil, electronics, international travel, and education while providing some respite to exporters.

Impact of the Rupee Falling to a Record Low

So far this month, the domestic currency has lost 202 paise, or more over 2%. It had dropped 5% in 2025 due to persistent withdrawals of foreign funds and a strong US dollar.

Importers are immediately impacted by a declining rupee since they must pay more for the same amount of products. Approximately 85% of India’s fuel needs, including gasoline, diesel, and jet fuel, are satisfied by imports.

How Import Costs Rise When the Rupee Weakens

Exporters will also profit because they will earn more rupees for each dollar they make.

Crude oil, coal, plastics, chemicals, electronics, edible oils, fertilizers, machinery, gold, pearls, precious and semi-precious stones, iron, and steel are all part of India’s import basket. A weakening rupee increases the cost of imports because importers must buy dollars to satisfy payments. In addition to oil, the cost of some cars, appliances, and electronic goods like mobile phone parts is probably going to increase.

Effect on Education, Travel, and Overseas Spending

Studying abroad becomes more expensive as the rupee weakens because students must pay more rupees for each dollar that foreign universities charge.

Traveling abroad: Since travelers must spend more rupees to purchase dollars for overseas expenses, traveling abroad becomes more costly.

Remittances and Export Gains

Remittances: Higher rupee conversions are advantageous to non-resident Indians (NRIs) sending money to India.

Exports: Because they make more rupees for every dollar, exporters benefit from the depreciation. Exporters that rely on imported inputs, however, might find that the advantages are somewhat countered.

Sector-Wise Impact of Rupee Depreciation

Theoretically, industries that rely less on imports, like textiles, will probably gain more from a declining rupee than industries that rely heavily on imports, like electronics.

India’s imports increased by 8.7% to $63.55 billion in December 2025, according to the most recent figures. In contrast to $24.53 billion in November 2025 and $22 billion in December 2024, the trade imbalance was $25.04 billion for the month.

Latest Trade and Import Data

In December 2025, crude oil imports—which are mostly valued in dollars—rose by almost 6% to $14.4 billion. Gold imports fell 12% to $4.13 billion, while silver imports increased by over 80% to $758 million.

According to the think tank GTRI, India must reevaluate its approach to trade policy and rupee management while striking a balance between growth and inflation control in order to achieve long-term economic stability.

Industry Views on the Falling Rupee

The Federation of Indian Export Organizations (FIEO) pointed out that although a declining rupee makes Indian products more competitive on the international market, industries that rely heavily on imports, like electronics and jewelry, may find their currency advantage offset by increased input prices.

Frequently asked questions

1. What caused the rupee’s value against the US dollar to drop to 92?

The strong US dollar, ongoing withdrawals from foreign portfolio investors (FPIs), unpredictability in the world economy, and increased demand for dollars to pay for imports like crude oil have all contributed to the rupee’s decline. Additionally, rising US interest rates have drawn money away from developing nations like India.

2. Which goods will cost more as a result of the rupee’s decline?

Crude oil, gasoline, diesel, LPG, fertilizers, culinary oils, machinery, chemicals, and electronic products (such as cell phones, parts, and appliances) will all cost more. Retail inflation may eventually rise as a result of this.

3. What impact does a declining rupee have on travelers and students?

Students and visitors must spend more rupees for every dollar spent on tuition, lodging, transit, and daily expenditures, making studying overseas and international trips more expensive.

4. Who gains from the depreciation of the rupee?

Because they receive more rupees for every dollar of export earnings, exporters profit. Remittances transferred to India are worth more rupees, which benefits NRIs as well. Exporters who use a lot of imported raw materials, however, might not benefit as much.

5. Does India’s economy as a whole benefit from a weak rupee?

It may increase exports and remittances in the near future. However, sustained weakening makes macroeconomic management more difficult by increasing inflation, the trade deficit, and the government’s import bill, particularly for crude oil.

Conclusion

For India, the rupee’s decline to a record low of 92 against the US dollar is a double-edged sword. Improved rupee realisations benefit exporters and remittance recipients, while import-dependent industries, consumers, students, and tourists pay more. Policymakers will need to carefully balance growth, price stability, and currency management as inflationary pressures increase and imports rise more quickly than exports.

Experts point out that boosting domestic manufacturing, lowering reliance on imports, and implementing a calibrated approach to trade policy and rupee management are all necessary for long-term economic stability.

Disclaimer:
This article is for informational purposes only and does not constitute financial, investment, or economic advice. Readers should consult qualified professionals before making any decisions based on this information.