Falling rupee leaves few Indian winners

US tariffs of 50% far outweigh benefits from a weak currency

- Team Mint

The Indian rupee’s recent slide beyond the 90-per-dollar mark offers little relief to its exporters, most of which are struggling under the weight of crippling tariffs imposed by the Donald Trump administration.

The only clear winners are the country’s dominant information technology (IT) companies, while sectors with high import content grapple with surging production costs.

While a weaker rupee typically enhances export competitiveness, its 5% depreciation this year to become Asia’s worst-performing currency is proving to be a weak cushion against the 50% punitive tariffs the US president unleashed on key Indian goods in August.

‘The damage extends across crucial sectors, including textiles, coal, energy, aviation, electronics, and chemicals. Labour-intensive export industries like apparel, which typically gain from a weak currency, are losing ground to rivals such as Bangladesh and Vietnam.

Ajay Sahai, director general and chief executive officer of the Federation of Indian Export Organisations (Fieo), said the benefit from the rupee’s 5% drop is overshadowed by the 50% US levies. The limited benefit from a cheaper rupee is confined to exporters shipping to non-US destinations, effectively shutting out India’s largest trading partner.

“If there are no orders (from the US), how will any depreciation in the rupee help?” Sahai questioned.