The Indian rupee has plunged to an all-time low against the US dollar, underscoring mounting pressure from Washington’s punitive tariffs on Asia’s third-largest economy.
The currency hit a record 88.36 per dollar last Friday, surpassing its previous historic low, as investor sentiment continues to weaken under the weight of new US trade measures imposed last month.
Foreign investors have already withdrawn a net $11.7 billion from India’s equity and debt markets so far this year. Analysts warn that the trend highlights the rupee’s vulnerability, placing it among the weakest performing Asian currencies in 2025.
The sharp tariffs introduced by the United States have clouded India’s growth outlook, raising concerns over trade prospects and fueling volatility in the financial markets.
In response, Prime Minister Narendra Modi has announced consumption tax cuts to cushion households and businesses from the economic strain. At the same time, New Delhi and Washington are considering resuming trade negotiations in a bid to resolve tariff-related disputes and address broader market barriers.
Indian exporters are grappling with uncertainty over future orders, while importers are being forced to intensify their foreign exchange hedging strategies. This heightened activity is distorting supply and demand dynamics in the currency market, adding further strain on the rupee.
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