Lok Sabha Question No. 5872 (UNSTARRED), answered on 2026-03-30
Subject: Effect of the Depreciation of Rupee on India's Foreign Exchange Reserves
Ministry: FINANCE
Asked by: Shri Neeraj Maurya

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 5872

TO BE ANSWERED ON 30.03.2026

## EFFECT OF THE DEPRECIATION OF RUPEE ON INDIA'S FOREIGN EXCHANGE RESERVES

## †5872. Shri Neeraj Maurya:

Will the Minister of Finance be pleased to state:

- (a)  whether the continuous fall in the value of the Indian Rupee against the US Dollar during the last 12 months has increased pressure on India's Foreign Exchange Reserves;
- (b)  if so, the detailed breakdown of the increase in India's annual 'Petroleum and Crude Oil Import Bill' due to the depreciation of the Rupee;
- (c)  whether the Government has formulated any new fiscal policy to control non-essential imports or provide export incentives to stabilise the weakening Rupee, if so, the details thereof; and
- (d)  the estimated long-term impact of the falling currency on the country's Current Account Deficit (CAD) and GDP growth rate?

## ANSWER

THE MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

- (a) The Indian Rupee (INR) depreciated against the US Dollar (USD), closing at ₹ 93.88 per USD on March 24, 2026, with a depreciation of 9.0 per cent in 2025-26 (till March 24, 2026).

The  value  of  the  INR  is  market-determined,  with  no  target  or  specific  level  or  band.  The Reserve Bank of India (RBI) regularly monitors the foreign exchange market and intervenes in situations of excess volatility. During the period April 2025 to Jan 2026, the RBI has made a net sale of USD 50.8 billion in the forex markets. The forex reserves of India stood at 668.3 end-March 2025 and stand at USD 709.8 billion as of March 13, 2026. The reserves are at a comfortable level covering 11.2 months of goods imports.

(b)            The  import  bill  for  India  for  crude  oil  and  various  petroleum  products  depends  on multiple  factors,  including  the  domestic  requirements  of  the  products,  the  time  the  import contracts  were  executed,  the  prevailing  international  market  prices  of  the  products,  the negotiated  import  price,  cost  of  logistics,  including  maritime  insurance  and  the  INR-USD exchange rate at the time of payment. Hence, the one-to-one impact of the depreciation of the rupee against the dollar on the value of the import bill for crude oil and petroleum products cannot  be  isolated.  This  needs  to  be  assessed  alongside  broader  market  and  contractual dynamics.

(c)   The Government has set the goal of achieving a self-reliant India with the primary aim of reducing  dependence  on  foreign  imports  and  building  a  resilient,  developed  nation.  The Government is consistently working to boost exports and expand the country's global footprint, combining  traditional  strengths  with  emerging  technology-driven  sectors.  Central  to  this ambition is the creation of a supportive ecosystem where exporters, particularly MSMEs, can compete confidently in international markets. This effort is reinforced by a dynamic policy framework,  strong  financial  incentives,  a  growing  digital  infrastructure,  improved  trade facilitation,  and  a  determined push to secure deeper market access through next-generation trade agreements.

(d)      The impact of depreciation of INR against the USD on the current account deficit (CAD) and  GDP  growth  depends  on  multiple  factors,  including  global  commodity  prices,  trade dynamics and capital flows. The depreciation of currency is likely to increase the import bill, which  may  impact  CAD.  On  the  other  hand,  depreciation  is  likely  to  enhance  export competitiveness,  which  in  turn  impacts  the  economy  positively.  GDP  would  be  impacted through the trade channel, likely imported inflation impacting consumption and investment, etc. Therefore, the overall impact on GDP growth and CAD would depend on the evolving trajectory of various macroeconomic parameters.