Weaker rupee to push India’s import bill: Global Trade Research Initiative

GTRI says depreciating domestic currency will increase India's gold import bill, especially as global gold prices have jumped 31.25 per cent, rising from USD 65,877 per kg in January 2024 to USD 86,464 per kg in January 2025

New Delhi: 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 GTRI said on Friday.

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 per cent, rising from USD 65,877 per kg in January 2024 to USD 86,464 per kg in January 2025. Since January 16, last year, the Indian Rupee (INR) has weakened by 4.71 per cent against the US dollar, falling from Rs 82.8 to Rs 86.7.

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In the last ten years, between January 2015 and 2025, the INR has weakened by 41.3 per cent against the US dollar, falling from Rs 41.2 to Rs 86.7, the Global Trade Research Initiative (GTRI) said in its report. In comparison, the Chinese Yuan depreciated by 3.24 per cent, 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.

The think tank also said that for sectors relying heavily on imports, a depreciating rupee against the US dollar increases input costs, reducing competitiveness.

In theory, sectors with low import dependence, like textiles, should gain the most from a weaker rupee, while high-import sectors like electronics should benefit the least.

The GTRI suggested that for India to achieve long-term economic stability, it must strike a careful balance between growth and inflation control while rethinking its rupee management and trade strategies.