A weak rupee, high oil prices pose a double whammy for India's import bill
India's import bill is facing a double hit from a weaker rupee and a sharp rise in Brent crude prices, affecting headline inflation and the trade deficit. The situation worsened after the Iran war broke out, triggering fears over supply disruptions and shipping risks around the Strait of Hormuz.
India's import bill is facing pressure from a weaker rupee and high oil prices. The rupee has weakened from 89.96 to 94.59 per US dollar since January 1, while Brent crude rose from $60.75 to $105.32 per barrel. This combination may increase the trade deficit and inflation. India pays for most imports in US dollars, especially oil, electronics, and gold. The country's merchandise imports stood at $713.53 billion from April to February 2025-26, with a trade deficit of $310.60 billion.
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