New Delhi
India’s Chief Economic Adviser V. Anantha Nageswaran has described the weakening rupee as a potential buying opportunity for long-term investors, calling the currency “fundamentally undervalued” despite near-term pressures.
Nageswaran said the current valuation offers an attractive entry point for those betting on India’s long-term growth story. His remarks come as the rupee continues to face sustained pressure from global economic headwinds.
The currency has been on a losing streak, recently slipping to 94.25 against the US dollar, weighed down by rising crude oil prices. Brent crude has remained above $100 per barrel amid tensions in the Middle East, increasing import costs and fuelling inflation concerns.
Foreign investor sentiment has also added to the pressure, with heavy outflows from equities. Foreign portfolio investor (FPI) exits have already crossed last year’s record levels, intensifying downward momentum in the currency. So far in 2026, the rupee has emerged as one of Asia’s weakest-performing currencies.
Analysts point to India’s dependence on energy imports as a key vulnerability, especially during periods of geopolitical instability. Elevated oil prices tend to widen the current account deficit and weaken the currency further.
Despite these challenges, policymakers remain cautiously optimistic. Sanjay Malhotra has projected economic growth of around 6.9% for the current financial year, although some forecasts have been revised downward due to global uncertainties.
Nageswaran has also warned that prolonged geopolitical tensions could impact economies through multiple channels, including higher energy prices, disrupted commodity supplies, rising logistics and insurance costs, and weaker remittance flows.
While short-term volatility may persist, his view underscores confidence in India’s economic fundamentals, suggesting that patient investors could benefit as conditions stabilise over time.
