On September 23, 2025, the Indian rupee fell to a record low of ₹88.37 against the U.S. dollar, weighed down by fresh U.S. trade tariffs and a sharp hike in visa fees for skilled workers. The twin policy moves have triggered concerns across India’s export and IT sectors, leading to a sell-off in the currency and related equities.
What’s Driving the Rupee’s Decline?
1. U.S. Tariff Expansion
The U.S. administration announced new tariffs on Indian-manufactured electronics and auto components, citing trade imbalances. This is expected to hurt outbound shipments and reduce dollar inflows.
2. H-1B Visa Fee Hike
A steep increase in H-1B visa application fees has raised operating costs for Indian IT firms, especially those with large U.S. exposure. This has led to a drop in investor sentiment and foreign fund outflows.
3. FII Selling Pressure
Foreign Institutional Investors (FIIs) sold over ₹1,800 crore worth of Indian equities in the past two sessions, adding pressure on the rupee.
4. Dollar Strength
The U.S. dollar index rose to a 6-month high, supported by strong retail data and hawkish Fed commentary, making emerging market currencies less attractive.
Rupee Performance Snapshot
This marks the rupee’s lowest closing level ever, surpassing the previous record set in August 2023.
What This Means for Stakeholders
- Importers: Higher costs for crude oil, electronics, and machinery
- Exporters: Mixed impact—IT firms face visa cost pressure, but pharma and textiles may benefit from weaker rupee
- Students & Travelers: Overseas education and travel become more expensive
- Investors: Currency volatility may affect equity and bond returns in the short term
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Final Takeaway
The rupee’s slide to ₹88.37/USD reflects a complex mix of global policy shifts, investor sentiment, and trade dynamics. While some sectors may benefit from a weaker currency, the broader impact on inflation, imports, and market stability will depend on how India responds to evolving U.S. policies.