Prices of imported goods may increase due to fall in rupee. Image Credit source: ChatGPT
The rupee falling to a historic low of 92 against the US dollar on January 23 could make everything from crude oil to electronic goods, foreign education and foreign trips quite expensive, which would increase inflation concerns, but exporters may get some relief. So far this month, the rupee has fallen by 202 paise or more than 2 percent. In 2025, it had declined by 5 percent due to continued withdrawal of foreign funds and strengthening of the dollar.
The immediate impact of the rupee’s depreciation will be on importers, who will have to pay more for the same quantity and price. India is 85 percent dependent on foreign oil to meet its needs like petrol, diesel and jet fuel. However, it is a matter of relief for Indian exporters because they are getting more rupees in exchange for dollars. Let us also tell you what kind of impact the continuous weakening of the rupee is likely to have on expenditure…
Effect of fall in rupee
- Import: India’s imports include crude oil, coal, plastic materials, chemicals, electronic goods, vegetable oils, fertilizers, machinery, gold, pearls, precious and semi-precious stones, and iron and steel. Importers have to buy US dollars to pay for imported goods. With the fall in rupee, imported goods will become expensive. Not only oil, but also electronic goods like mobile phone parts, some cars and home appliances can be expensive.
- Foreign Education: The weakening of the rupee against the US dollar will make foreign education costlier, as students will have to pay more rupees for every dollar taken by foreign institutions.
- Foreign Trip: Due to the weakening of the local currency, one will have to spend more rupees to buy one US dollar for travel expenses.
- Remittance: Non-resident Indians (NRIs) who send money to their country will have to send more amount in rupees.
- Export: Exporters are likely to benefit from rupee devaluation as they will get more rupees per US dollar. However, exporters dependent on imports may not benefit from the weakening of the Indian currency.
How are the import figures?
Theoretically, low import-dependent sectors like textiles should benefit the most from a weaker rupee, while high-import sectors like electronics should benefit the least. According to the latest data, the country’s imports increased by 8.7 percent to US $ 63.55 billion in December 2025. The difference between imports and exports, i.e. trade deficit, stood at US $ 25.04 billion in December 2025, whereas it was US $ 24.53 billion in November last year and US $ 22 billion in December 2024. Crude oil imports, which are mostly priced in US dollars, increased by about 6 per cent to US$14.4 billion in December 2025. Silver import also increased by almost 80 percent to 758 million US dollars. However, gold imports declined by 12 percent to US $ 4.13 billion.
What did the experts suggest?
Think tank GTRI has suggested that India needs to strike a careful balance between growth and inflation control to achieve long-term economic stability, as well as rethink the management of the rupee and trade strategies. According to the Federation of Indian Export Organizations (FIEO), while the rupee’s depreciation has increased the price competitiveness of Indian products in global markets, the cost of imported inputs for highly import-dependent sectors like gems and jewelery and electronics may partially offset the currency gains.