Winning Bizness Desk

Mumbai. The Indian rupee has slipped to a record low against the US dollar during the three months of the ongoing America-Iran war, putting direct pressure on household budgets, investments and travel expenses. On Monday, the rupee closed at ₹95.23 against one dollar, after touching an all-time low of ₹96 earlier this month. Since the conflict began in late February, the rupee has weakened by nearly ₹5, mainly due to rising crude oil prices, strong dollar demand and continuous withdrawal of foreign funds from Indian markets. Economists say the fall is now affecting common people through rising fuel prices, expensive imports and growing inflation fears across the country.

Middle East tensions weaken Indian currency

After the Russia-Ukraine conflict, fresh tensions in the Middle East have once again shaken global markets. On February 28, when the America-Iran war started, the rupee was trading near ₹91 per dollar. Since then, global crude oil prices have surged sharply because investors fear supply disruptions from oil-producing regions.

The pressure on the rupee increased further because:

• Foreign Institutional Investors (FII) pulled money out of Indian markets
• The US dollar strengthened globally
• India’s oil import bill became costlier
• Global investors shifted towards safer assets

Prime Minister Narendra Modi has also appealed to citizens to help protect India’s foreign exchange reserves. He urged people to reduce unnecessary fuel use, avoid foreign trips for a year and stay away from heavy gold purchases.

Kitchen budgets set to become costlier

Experts say the biggest impact will be visible inside homes. India imports nearly 60% of its edible oil needs, including palm, soybean and sunflower oil. As the dollar becomes expensive, imported products automatically become costlier in India.

According to commodity and currency experts:

• LPG, CNG and diesel transportation costs may rise
• Vegetables, milk and grocery prices could increase
• Delivery charges and e-commerce products may become expensive
• Imported electronics, smartphones and air conditioners may see price hikes

Transport companies, trucks and railways mostly depend on diesel. As freight charges rise, mandi prices and retail rates are also expected to move up. Economists warn that inflation pressure may continue if the rupee remains weak for a longer period.

Import-dependent sectors face heavy pressure

The falling rupee is also hurting several companies listed on the stock market. Sectors heavily dependent on imports are expected to face higher costs and weaker profits. Aviation, paint, chemical and oil marketing companies are among the worst-hit industries.

Experts say aviation companies are under severe stress because aviation turbine fuel now forms nearly 55-60% of operating expenses, compared to 30-40% earlier. Airlines also pay aircraft lease rent and maintenance costs in dollars. Paint makers are facing pressure because crude derivatives and titanium dioxide account for nearly half of their raw material costs.

Market analysts believe company earnings may weaken in coming quarters if crude oil prices remain elevated and the rupee continues to slide against the dollar.

IT and pharma exporters gain from weak rupee

While several sectors are under pressure, export-driven industries are getting support from the weaker currency. Major IT firms like Infosys, TCS and Wipro earn a large share of their revenue in dollars. Pharmaceutical exporters are also expected to benefit because overseas earnings become more valuable after conversion into rupees.

Some sectors likely to gain include:

• IT services companies
• Pharma exporters
• Textile exporters
• Gems and jewellery businesses
• Gold ETFs and Sovereign Gold Bonds investors

Experts are advising retail investors not to panic. Instead, they suggest balancing portfolios with export-oriented companies and limited exposure to gold investments during uncertain times.

Foreign travel and education expenses jump

The rupee’s weakness has made foreign travel significantly more expensive for Indians. Flight tickets, hotel bookings, shopping and food expenses abroad are now costing far more than before. A US trip planned with a budget of 5,000 dollars earlier required around ₹4 lakh when the exchange rate was ₹80 per dollar. At the current rate near ₹96, the same trip now costs nearly ₹4.8 lakh.

Domestic travel has also become expensive because airlines and hotel chains are increasing prices to offset rising operating costs.

There are growing concerns over future loan burdens as well. India imports nearly 85% of its crude oil requirement. If inflation rises sharply, the Reserve Bank of India may eventually increase repo rates. That could make home loans and car loan EMIs costlier for borrowers with floating interest rates.

Common citizens are now being advised to:

• Review monthly budgets carefully
• Avoid unnecessary luxury spending
• Build emergency savings for 6-12 months
• Diversify investments across equity, gold and fixed income assets

Students studying abroad are also feeling the pressure as tuition fees, hostel expenses and living costs have become far more expensive after rupee conversion.