The depreciation of the Indian rupee against the US dollar is expected to increase the country's import bill by approximately USD 15 billion, think tank GTRI stated on Thursday.
Compared to December last year, the Indian rupee (INR) has depreciated by 2.34 per cent against the US dollar, weakening from ₹83.25 to ₹85.20, while the Chinese yuan has fallen by 0.06 per cent, the Global Trade Research Initiative (GTRI) noted.
It added that this depreciation of the INR will adversely affect gold imports, particularly as gold prices have risen by 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 become considerably more expensive due to the rupee's depreciation.
However, the impact has been cushioned by a 5 per cent decline 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 stated, 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 magnifies the cost of these imports, further straining trade balances, he explained.
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