The Indian rupee plunged to a historic low of ₹88.76 against the US dollar on Thursday, weighed down by rising US tariffs on Indian exports, consistent foreign outflows, and steep hikes in H-1B visa fees. The sharp depreciation is expected to hit remittances, overseas education, IT services, and personal finances in the months ahead.
The impact was immediately visible on Dalal Street, with Tata Consultancy Services (TCS) — India’s largest IT company — slipping to a 52-week low of ₹2,951 per share on September 25, reflecting investor concerns over the currency slide.
How the Weak Rupee Affects Indians
1. Inflation Surge
A falling rupee makes imports more expensive, especially crude oil, electronics, and consumer goods. Higher import costs translate into rising fuel prices and overall inflation, shrinking household budgets and reducing purchasing power.
2. Costlier Overseas Education and Loans
For students studying abroad, tuition fees, accommodation, and daily living costs are set to rise sharply in rupee terms. Similarly, borrowers with foreign currency loans, particularly in dollars, will face higher repayment obligations, increasing debt burdens.
3. Pressure on Investments
Foreign Institutional Investors (FIIs) have been pulling money out of Indian equities in recent months. Between July and early September 2025 alone, FIIs sold over ₹1 lakh crore worth of Indian stocks, citing stretched valuations, weak earnings, and uncertainty over trade tensions with the US. A weaker rupee could accelerate this trend, though dollar-denominated foreign assets may see gains when converted back into rupees.
4. Expensive Travel and Imports
International travel and purchases of imported goods like smartphones, laptops, and luxury items will now cost significantly more. Indians will need to spend additional rupees to cover dollar-priced expenses, making overseas trips and high-end purchases less affordable.
5. Higher Debt Repayment Costs
Government and corporate borrowers with overseas debt will face steeper repayment obligations, leading to higher fiscal pressures and business risks. This could affect India’s debt sustainability and financial stability if the rupee continues to weaken further.
Outlook
The rupee’s slide against the US dollar underscores the economic challenges India faces amid global trade tensions, volatile capital flows, and rising international borrowing costs. Analysts warn that unless corrective measures are taken, the depreciation could put long-term strain on both household budgets and the broader economy.
For individuals, the best course of action may be to reassess foreign spending, plan overseas education costs carefully, and manage debt wisely. Policymakers, meanwhile, will need to strike a balance between stabilizing the currency and supporting economic growth.
Gaurav Chaudhary