As we enter 2026, one number dominates headlines, prime-time debates, and political speeches alike: ₹90 per US Dollar.

To some, it signals economic decay.
To others, it reflects global turbulence beyond India’s control.
And on social media, it’s reduced to a meme: “From 60 to 90—what happened?”

But currencies don’t move on emotions, nationalism, or TV debates.
They move on inflation, trade balances, capital flows, and interest rates.

Viewed through that lens, the rupee’s story is far more nuanced—and far less dramatic.

The Current State of the Rupee: Facts First

Let’s start with data, not drama.

  • As of January 1, 2026, the rupee trades between ₹90.00–₹90.35 per US Dollar
  • It recorded its worst annual fall in three years, depreciating nearly 5% in 2025
  • In December, it briefly touched an all-time low of ₹91.55 before stabilising

This didn’t happen overnight—and it didn’t happen in isolation.

2025 was defined by:

  • High US interest rates
  • Risk-off global sentiment
  • Capital rushing back to the world’s “safe haven”—the US Dollar

In that environment, almost every emerging-market currency weakened.
India was not an exception—it was part of a pattern.

The Narrative War: Media vs Politicians

Business Media: “Capital Account Crisis”

Indian business channels—ET, CNBC-TV18, Bloomberg India—frame the fall as a capital-flow problem.

Their key statistic:

  • Foreign Portfolio Investors withdrew ~$18 billion from Indian equities in 2025

The logic is straightforward:

When foreign capital exits, dollar demand rises, and the rupee falls.

That’s factually correct. But the story is not complete!

But facts don’t dominate narratives—politics does.

Politicians: One Number, Two Stories

Government / BJP Narrative

The government avoids calling this a “rupee crisis.”

Instead, it emphasises:

  • Dollar strength, not rupee weakness
  • India’s $690 billion forex reserves as a buffer
  • No balance-of-payments stress like 1991

Technically, this is valid.
India is not short of dollars.

Opposition / Congress Narrative

For the opposition, ₹90 is a political weapon.

The comparison is relentless:

  • ₹60 in 2014
  • ₹90 in 2026

Emotionally powerful—but economically incomplete.

Is a Falling Rupee Bad? Yes—On the Imports Side

A weak rupee acts like an “invisible tax” because India is a net importer.

Energy: Crude Oil

India imports over 80% of its crude oil.

As the rupee weakens:

  • Crude becomes costlier in rupee terms
  • Fuel prices rise
  • Transport costs increase
  • Food inflation follows

This is the most direct pain channel for households.

Electronics & Technology

“Make in India” still relies heavily on imported inputs:

  • Chips
  • Displays
  • Batteries
  • Precision machinery

A weaker rupee means:

  • Costlier smartphones and laptops
  • More expensive EVs

Even domestic assembly doesn’t escape dollar pricing.

Fertilisers

India imports key fertiliser chemicals.

Higher import costs lead to:

  • Increased farming input costs
  • Higher subsidy burden—or higher food prices

Either way, the rupee’s fall eventually reaches the dinner plate.

Is a Weak Rupee Good for Anyone? Yes—and More Than You Think

Every currency move creates winners.

IT Services: The Obvious Beneficiaries

Firms like TCS, Infosys, and Wipro earn in dollars and spend in rupees.

When the dollar moves from ₹83 to ₹90:

  • Rupee revenues rise automatically
  • Margins expand
  • No productivity change required

This is why IT stocks often rally during rupee weakness.

Pharma: The “Pharmacy of the World”

Indian pharma exports at global scale.

A weaker rupee:

  • Boosts export realisations
  • Improves competitiveness
  • Supports R&D investment

This advantage is structural, not speculative.

Agriculture & Food Exports

Agro exports benefit most because they have:

  • Low import dependence
  • Local cost structures
  • Dollar-denominated revenues

Rice, spices, marine products—all become more competitive globally.

New-Age Winners: Defence and Space (Strategic Exports)

The most important beneficiaries of a weak rupee aren’t traditional sectors—they’re strategic ones.

Defence: From Importer to Arsenal

India has executed a quiet but historic pivot.

  • FY 2024–25 defence exports: ₹23,622 crore ($2.76 billion)
  • Growth: 12% YoY
  • Private sector share: 65%

For the first time, private firms—not PSUs—are driving defence exports.

A weaker rupee makes:

  • Indian missiles, radars, and helicopters cheaper
  • Developing nations less dependent on US/EU suppliers

This is where currency economics turns into geopolitics.

Space: When Rockets Become Exports

India’s space sector has shifted from ambition to execution.

  • Current size: ~$9 billion
  • Projected by 2033: ~$45 billion

Private players like Skyroot and Agnikul now export launch services, not just components.

Since space is capital-intensive:

  • Indigenous rockets + weaker rupee
  • Allow India to undercut global competitors by 30–40%

This advantage doesn’t exist in IT.
It exists only in deep-tech sectors.

The Absurd Fantasy: What If $1 = ₹1?

This idea resurfaces often—usually wrapped in nationalism.

In reality, $1 = ₹1 would be economic devastation.

Scenario: IT Services Project

A $1 million IT project today brings in ₹9 crore—just enough to pay 60 engineers earning ₹15 lakh each.
At $1 = ₹1, the same project earns ₹10 lakh—not enough to pay even one engineer.
This isn’t salary adjustment or efficiency gain.
It’s instant shutdown, mass layoffs, or relocation abroad.
A currency that strong doesn’t create pride—it kills the business outright.

Scenario: Textile Exporter in Tiruppur

An Indian exporter sells a T-shirt at $5, earning ₹450 at ₹90/$—enough to pay wages and costs.
At $1 = ₹1, To recover the same ₹450 in costs, the shirt would effectively cost $450 globally, while Bangladesh or Vietnam sells at $5–$6.
Buyers cancel Indian orders overnight.
Factories shut, workers are laid off, and entire export clusters collapse.

Global trade has zero patience for ideology.

A strong currency without matching productivity isn’t pride.
It’s self-sabotage.

What If the Rupee Stayed at 90 for 10 Years?

This is more dangerous than depreciation.

Assume:

  • India inflation: 4%
  • US inflation: 2%
  • Exchange rate frozen at 90

This causes real overvaluation.

Exports slowly lose competitiveness until the currency snaps—just like 1991.

Gradual depreciation is healthier than forced stability.

The Historical Truth: The Rupee Always Falls

Not due to incompetence—but because India’s inflation is structurally higher.

YearGovernmentUSD/INRInflation (%)Notes
1998NDA (Vajpayee)42~7–8%NDA policies
2004UPA45~4–5%*Govt. change (NDA Policies)
2009UPA II48~9–10%UPA Policies
2014NDA (Modi I)62~8–9%*Govt. Change (UPA II Policies)
2019NDA II70~4–5%NDA II policies
2024NDA III83~5–6%NDA III policies
2025NDA III90~5–6%NDA III policies

*Inflation is a lagging factor: the first months of 2004/2014 were under previous government, so the number doesn’t fully reflect new government’s initial policy impact.

“Across governments, crises, and ideologies, one constant remains: India’s inflation stays higher than America’s—and the rupee adjusts accordingly.”

Add global shocks:

  • 2008 financial crisis
  • COVID
  • Russia–Ukraine war
  • India–Pakistan tensions

Currencies reflect stress, not slogans.

RBI’s Real Job: Managed Volatility

The RBI isn’t defending a number—it’s defending order.

  • 2025 intervention: $30+ billion sold
  • Goal: prevent panic, not prevent movement

A 10% crash in a week causes capital flight.
A 3–4% annual decline allows planning.

That’s managed volatility—not weakness.

Final Take: The Rupee Isn’t Weak—the Dollar Is Artificially Strong

For a developing economy:

  • A currency depreciating near the inflation differential
  • Signals competitiveness, not collapse

The real story is:

  • High US interest rates
  • Global capital hiding in dollars
  • An artificially strong dollar in uncertain times

The danger isn’t depreciation.
The danger is pretending stability can be forced forever.

Economics always wins.
Narratives last only till the next balance sheet.

Thanks for reading!!Are you seeing the impact of the ₹90 Rupee in your daily life?Drop a comment below—I’d love to hear how you’re navigating this.

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