The depreciation of Indian rupee against the US dollar is expected to push the country’s import bill by about USD 15 billion, think tank GTRI said on Thursday. Compared to December last year, the Indian Rupee (INR) has depreciated 2.34 per cent against the US dollar, moving from Rs 83.25 to Rs 85.20, while the Chinese Yuan has weakened by 0.06 per cent, the Global Trade Research Initiative (GTRI) said. It added that this depreciation of the INR will negatively impact gold imports, especially as gold prices have surged 27 per cent from USD 2,066.26 per ounce in December 2023 to USD 2,617.11 per ounce in December 2024.
India’s oil imports, mostly priced in USD, could have been significantly costlier due to the rupee’s depreciation, however, the impact has been mitigated by a 5 per cent drop in Brent crude prices, from USD 77.6 per barrel in December 2023 to USD 73.7 per barrel in December 2024, it said.
“Overall India’s import bill will increase by about USD 15 billion due to the INR depreciation impact,” GTRI Founder Ajay Srivastava said, adding that the most significant effect of the INR’s depreciation will be on India’s USD 100-billion worth of industrial goods imports from China.
Since both the INR and the yuan have weakened against the US dollar, the dual depreciation amplifies the cost of these imports, further straining trade balances, he said.
Nominations for ET MSME Awards are now open. The last day to apply is December 31, 2024. Click here to submit your entry for any one or more of the 22 categories and stand a chance to win a prestigious award.
