The Indian Rupee fell to a record low on Tuesday, with pressure mounting after the US increased visa fees, further weakening the currency’s outlook.
The Rupee touched a lifetime low of 88.62 against the greenback, surpassing its previous record of 88.4550 set around two weeks ago.
The Rupee’s fall came after a sharp hike in H-1B visa fees, which may slow the movement of Indian workers to US clients and potentially affect the profitability of India’s IT sector, Reuters reports.
This could also impact equity flows, as foreign investors reassess their investments in IT companies.
Moreover, reduced deployment of workers to the US could lower remittances, further reducing Dollar inflows into India.
The visa fee increase comes amid existing external pressures, including 50% US tariffs on Indian goods, the highest among Asian peers, which are already expected to weigh on exports.
For the Rupee, pressures have intensified, with tariffs reaching 50% and the recent visa fee hike adding further downside, particularly affecting equity inflows into the IT sector.
The Reserve Bank of India has scope to allow the Rupee to depreciate gradually, according to analysts. With inflation projected at roughly 4–4.5% for fiscal year 2026-27, a moderate decline would be manageable.
Signs suggest the RBI is adopting this strategy, intervening in the market to support the Rupee without defending any particular exchange rate.
Bankers said interventions are carefully calibrated to keep the Rupee’s depreciation orderly, enabling adjustment without causing market disruption.
On Tuesday, the central bank likely sold Dollars through state-run banks around the 88.50 level to support the Rupee before permitting further declines.
The Rupee has underperformed its Asian peers so far this year, missing out on gains from the recent decline in the Dollar index.
High US tariffs on Indian goods have hurt export prospects and limited foreign capital inflows, adding pressure on the currency.
In 2025, foreign investors have withdrawn over $15 billion from Indian equities.