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Depreciation of Indian rupee likely to push India’s import bill by about $15 billion: GTRI

27 Dec 2024 Evaluate

Expressing cautiousness over India’s import bill, the Global Trade Research Initiative (GTRI) has said that the depreciation of Indian rupee against the US dollar is likely to push the country's import bill by about $15 billion. It noted 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.

It added that this depreciation of the INR will negatively impact gold imports, especially as gold prices have surged 27 per cent from $2,066.26 per ounce in December 2023 to $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 $77.6 per barrel in December 2023 to $73.7 per barrel in December 2024.

GTRI Founder Ajay Srivastava said ‘Overall India's import bill will increase by about $15 billion due to the INR depreciation impact’, and added that the most significant effect of the INR's depreciation will be on India's $100-billion worth of industrial goods imports from China. He said 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.

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