The Indian rupee slumped to a fresh record low , falling to ₹88.33 per U.S. dollar, breaching its previous lifetime low of ₹88.3075. The persistent depreciation reflects market unease over the impact of higher U.S. tariffs on Indian goods, which now stand at 50% following Washington’s latest increase.
“Unless we see some improvement in trade relations between India and the U.S., we cannot expect any stability in the rupee. Everything now depends upon the RBI, on how they plan to manage the markets,” said V.R.C. Reddy, treasury head at Karur Vysya Bank, in remarks to Reuters.
The Reserve Bank of India (RBI), while maintaining it does not target specific exchange rates, has a track record of stepping in to curb excessive volatility. Market participants are closely watching whether it will intervene to calm the current slide.
Economists warn that the tariffs are a significant blow to India’s export competitiveness, particularly in textiles, engineering goods, and other labor-intensive sectors. A slowdown in exports risks widening the trade deficit and weighing on corporate earnings.
Adding to concerns, foreign investors have pulled out $2.4 billion from Indian equities in the past three sessions, according to Reuters data.
Job Creation Slows
The stress on the economy is further underscored by weakening job creation. Net formal job additions under the Employees’ Provident Fund Organisation (EPFO) have fallen for two straight years since peaking in FY23.
- FY23: 13.8 million jobs
- FY24: 13.1 million jobs (down 5.1%)
- FY25: 12.9 million jobs (down 1.3%)
The number of establishments making their first Electronic Challan cum Return (ECR) filings also slipped to 52,309 in FY25, down 6.6% from a year earlier.
While India continues to project strong GDP growth, the combination of a weakening rupee, higher trade tariffs, export slowdown, and declining formal job creation paints a challenging picture for policymakers.
