Why is the Indian rupee falling against the US dollar?

The rupee's fall is attributed to less aggressive Reserve Bank of India intervention, a pending US-India trade deal, and significant foreign capital outflows.

How are US tariffs affecting Indian exporters?

US tariffs are negating the benefits of the rupee's depreciation, making it difficult for sectors like textiles and apparel to compete globally.

Which Indian sectors are benefiting from the weaker rupee?

India's dominant information technology (IT) companies are the main beneficiaries as they have escaped US tariffs and gain from currency translation.

Home / Business and Economy / Exporters Squeezed: Weak Rupee No Match for US Tariffs

Exporters Squeezed: Weak Rupee No Match for US Tariffs

5 Dec

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Summary

US tariffs negate rupee's depreciation benefit for most Indian exporters.
IT companies are the main beneficiaries of the weaker rupee.
Sectors with high import costs face rising production expenses.

Exporters Squeezed: Weak Rupee No Match for US Tariffs

The recent depreciation of the Indian rupee beyond the 90-per-dollar mark offers minimal solace to Indian exporters, who are significantly impacted by substantial US tariffs. The rupee's 5% decline this year, marking it as Asia's worst-performing currency, has been overshadowed by the 50% punitive tariffs introduced by the US administration in August, effectively negating its usual export competitiveness benefits.

Key sectors such as textiles, coal, energy, aviation, electronics, and chemicals are facing considerable damage. Labour-intensive industries like apparel, which typically benefit from currency devaluation, are losing ground to competitors in Bangladesh and Vietnam. Exporters noted that the benefit of a cheaper rupee is entirely eclipsed by US levies, particularly impacting trade with the US, India's largest trading partner.