MUMBAI — The Indian rupee fell past 90 to the dollar for the first time on record, hitting a new USD–INR low, as fresh tariffs by the United States and mounting capital outflows slammed into Asia’s No. 3 economy, Dec. 3, 2025. The move above the psychologically important 90 level came after months of outflows from Indian markets by foreign investors, and as Washington said last week that it plans to double tariffs on a swathe of Indian exports, escalating a diplomatic and trade conflict with the South Asian nation.
The rupee briefly hit around 90.14 before retracing just below that level, still down about 5% this year and the worst-performing major Asian currency in 2025, traders said. Foreign investors have sold around $17 billion of Indian equities, with the merchandise trade deficit exceeding $40 billion in October alone and foreign direct investment turning negative, putting additional strain on the currency and the broader balance of payments.
The breach of 90 on Wednesday marked a fall over the eight months from levels near 85, which one Reuters analysis linked to steady portfolio outflows and importers scrambling to secure dollars. The new level flashed in real-time quotes on XE’s USD-to-INR converter was not far from the threshold in late-afternoon Mumbai trade, indicating that the rupee’s reversal is likely to be more than a fleeting spike.
USD/INR Ablaze USD/INR fires off sense of inflation fears and panic in markets
For households and firms, the latest twist in USD-to-INR rates rapidly translates into higher prices for imported fuel, electronics, or overseas tuition fees, and into slimmer margins for businesses that depend on dollar-priced inputs. An explainer in The Economic Times cautioned that a “relentlessly weak” rupee could put a squeeze on Dalal Street valuations by pushing borrowing costs and inflation expectations higher.
The Reserve Bank of India has sought to blunt the effect, selling dollars from its nearly $700 billion in reserves, but largely letting the rupee serve as a “shock absorber” while attempting to prevent disorderly moves. “The Reserve Bank has probably gone away from the defence of levels, as it did at 88.80 in January this year, to just smoothening out the volatility as capital flows and tariff wars dictate USD/INR,” analysts wrote in a note on Wednesday.
Jumbo-sized tariff hikes by the U.S. that have raised duties on many of India’s exports to as high as 50% are at the core of the latest downturn, following President Donald Trump’s order this summer to more than double so-called reciprocal tariffs on Indian goods. India has denounced the measures as “unfair, unjustified and unreasonable,” and the spat has embroiled a wider 2025 United States–India diplomatic and trade spat that has frozen investment sentiment on both sides.
Veterans of the currency markets say the move through 90 is just the latest chapter in a long, fitful decline. (At the height of the 2013 “taper tantrum,” when the rupee breached 68, headlines worried about a full-blown crisis, as this contemporaneous coverage documents.) A little over a decade later, it was pushing beyond 83 in 2022 during aggressive U.S. rate hikes, and while numbers like that may seem humble to traders staring at USD to INR around 90, they were huge back then.
Along with the rupee, which has fallen by about 5% this year, analysts see it trading near 91.30 at the end of 2026 if trade tensions persist. Investors are watching this week’s RBI policy meet for pointers around a U.S.–India trade deal. With tariffs not yet waning and foreign inflows finding better targets, the easiest path for USD/INR is up until proven otherwise. This reality will require 90 to shift gears from technical resistance to support.
