Indian Rupee's Decline Offers Mixed Blessings for Exporters Amid US Tariffs

The Indian rupee has plunged to record lows, becoming Asia's worst-performing currency, recently dipping beyond 90 to the US dollar. This decline, which deepened over the past week, poses both challenges and opportunities for the Indian economy as it seeks to finalize a trade deal with the United States.

Ajay Sahai, director general of the Federation of Indian Export Organisations, noted that the rupee's depreciation is providing short-term relief to India's labour-intensive exporters, particularly in the apparel and footwear sectors, as they face US tariffs of up to 50 percent.

The exporters are able to absorb part of the tariff burden due to the weaker rupee, helping them maintain their customer base in the US market. Despite this, India's merchandise exports fell 11.8 percent year-on-year to 34.4 billion US dollars in October, with shipments to the US dropping 8.5 percent for the second consecutive month of contraction.