Depreciating Rupee: An Export Paradox

The Global Trade Research Initiative warns that the weakening Indian Rupee is increasing import costs, particularly in high-import sectors like electronics and machinery. Despite the belief that a weaker currency aids exports, India's decade-long data suggests the opposite. High-import sectors prosper while labour-intensive sectors struggle.

The depreciating Indian Rupee is taking a toll on the nation's economy, driving up import costs for essentials like crude oil and gold, according to the Global Trade Research Initiative (GTRI).

Ajay Srivastava, GTRI's founder, highlights that while traditional economic theory predicts a weaker currency should boost exports, India's past decade presents a contrary narrative.

Data reveals high-import industries thrive despite the rupee's fall, while labour-intensive sectors falter. Srivastava emphasizes the need for a balanced approach to economic growth and rupee management.

(With inputs from agencies.)