Indian rupee weakens to record low amid fallout from Russia's war against Ukraine
Photo: Indian Prime Minister Narendra Modi (Getty Images)
The Indian rupee became Asia's worst-performing currency in 2025 due to high US tariffs, the consequences of the war in Ukraine, investor outflows, and a current account deficit, according to Bloomberg.
The Indian rupee is currently showing the worst results among all Asian currencies at the end of 2025.
This is due to the announced high US tariffs on Indian goods and the threat of sanctions for purchasing Russian energy and weapons. As a result of these factors, foreign investors have withdrawn about $16.3 billion from the Indian stock market.
If the situation does not change, the Indian rupee will break the record for the largest annual decline since 2022.
In an attempt to stabilize the rupee, the Reserve Bank of India (RBI) has sold more than $30 billion from its foreign exchange reserves since the end of July, temporarily avoiding a new low in October.
However, on November 21, the rupee fell to 89.48 per dollar, indicating a temporary halt to central bank interventions. Experts believe that the RBI is conserving its reserves in anticipation of trade negotiations with the US.
A weak rupee has both positive and negative consequences: it makes Indian goods cheaper in foreign markets and supports the families of workers abroad through remittances, but at the same time, the rise in import prices increases the cost of oil, fertilizers, and electronics.
The rupee is currently at a critical level, and its future dynamics will depend on trade negotiations with the US and the RBI's ability to support the currency.
Russia-India partnership
India has suffered economic and trade losses due to its cooperation with Russia, especially in the context of Russia's war against Ukraine and sanctions pressure from the US and the EU.
Due to its close relations with Russia, Washington raised tariffs on most Indian goods to 50% in 2025, including additional tariffs related to purchases of Russian energy resources and weapons. This harmed Indian manufacturers targeting the US market.
That is why, in December 2025, India plans to reduce Russian oil exports to their lowest level in three years.
Earlier, RBC-Ukraine reported that Indian energy giant Reliance Industries had completely stopped importing Russian oil as of November 20. Instead, Reliance Industries purchased millions of barrels of oil from the Middle East and the US after the US imposed sanctions on two Russian producers.
