Macro & cycles

The rupee's bad year is the exporters' best year

Aabhas TripathiAabhas Tripathi5 August 2026

Over the twelve months to June 2026, the rupee fell against every major currency it trades with. The slide runs from barely measurable against the Indonesian rupiah to 10.4% against the US dollar and 19.3% against the South African rand. In the same stretch, India’s merchandise exports climbed to an all-time high of $45.2 billion in May, up 18% year on year, led by engineering goods, electronics and petroleum products.

vs Indonesian rupiahINR −0.25% vs Indonesian rupiah, 12 months to 30 June 2026−0.25%vs Canadian dollarINR −5.82% vs Canadian dollar−5.82%vs British poundINR −6.62% vs British pound−6.62%vs EuroINR −6.98% vs euro−6.98%vs Swiss francINR −8.31% vs Swiss franc−8.31%vs Russian rubleINR −10.12% vs Russian ruble−10.12%vs US dollarINR −10.40% vs US dollar−10.40%vs Australian dollarINR −16.07% vs Australian dollar−16.07%vs Brazilian realINR −16.17% vs Brazilian real−16.17%vs Chinese renminbiINR −16.53% vs Chinese renminbi−16.53%vs South African randINR −19.31% vs South African rand−19.31%
Change in the rupee against eleven currencies, twelve months to 30 June 2026. Exports data: merchandise, May 2026. Data: Bloomberg, CMIE.

The two facts are connected. A currency that has fallen against every trading partner makes every Indian export cheaper in every destination simultaneously. Engineering goods invoiced in dollars, electronics assembled for Europe, refined petroleum sold across Asia: all of it gained price competitiveness in the exact months the export line inflected. The export chart shows a series that spent 2022 to 2024 oscillating between $32 and $42 billion a month, and has now broken above the range.

The tailwind could stiffen further. Proposed trade agreements with the EU, US and UK are estimated to add roughly $53 billion a year to exports once implemented, against a current annual run-rate near $500 billion. A cheaper currency plus lower tariff walls is the classic export recipe, and India has rarely had both at once.

The caveat is that the same depreciation that flatters exporters taxes importers and feeds inflation, which is why the RBI is working to stabilise the rupee rather than extend its slide. The window in which India gets export-boosting currency weakness without destabilising outflows is exactly that, a window.

What we’ll watch: whether monthly exports hold above the old $42 billion ceiling once the rupee stabilises, and the implementation timelines on the EU, US and UK trade agreements.

Source: Data: Bloomberg, CMIE; as of 30 June 2026.
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