Weaker rupee to push India's import bill, says Global Trade Research Initiative

Weaker rupee raises import bill, impacts sectors differently, challenges conventional wisdom on currency's impact on exports.

The weaker rupee will push the country's import bill due to higher payments for crude oil, coal, vegetable oil, gold, diamonds, electronics, machinery, plastics, and chemicals, economic think tank Global Trade Research Initiative (GTRI) said on Friday (January 17, 2025).

Citing an example, it said the depreciating domestic currency will increase India's gold import bill, especially as global gold prices have jumped 31.25%,, rising from $65,877 per kg in January 2024 to $86,464 per kg in January 2025.

Since January 16, last year, the Indian Rupee (INR) has weakened by 4.71% against the U.S. dollar, falling from ₹82.8 to ₹86.7.

In the last ten years, between January 2015 and 2025, the INR has weakened by 41.3% against the U.S. dollar, falling from ₹41.2 to ₹86.7, the GTRI said in its report.

In comparison, the Chinese Yuan depreciated by 3.24%, from Yuan 7.10 to Yuan 7.33.

"Overall, weaker INR will inflate import bills, raise energy and input prices, leading to an overheated economy. Past ten-year export data says that weak INR does not help exports contrary to what economists say," GTRI Founder Ajay Srivastava said.

He added that while conventional wisdom suggests that a weaker currency should boost exports, India's decade-long data tells a different story: high-import sectors are thriving, while labour-intensive, low-import industries like textiles are floundering.