Under the impact of high tariffs imposed by the United States, the Indian Rupee is hovering at historic low levels. It is feared that its performance in the future may continue to lag behind other Asian currencies.

The Indian rupee softened on Monday, hovering near historic lows. Analysts expect the rupee to continue to underperform compared to other Asian currencies, against the backdrop of high tariffs imposed by the United States on India. Data shows that the USD to INR exchange rate is at 88.27, slightly higher than the historic high of 88.3075 set last Friday. So far this year, the rupee has been the worst performing Asian currency, with a 3% drop against the US dollar. In contrast, the Thai baht, Singapore dollar, and South Korean won have all risen by over 6%, while offshore yuan has increased by 3%. The weak performance of the rupee is expected to continue, as India faces the highest export tariffs to the US among Asian economies. According to a notice issued by the US Department of Homeland Security, starting from August 27th local time, the US will impose tariffs on all goods imported from India for consumption or warehousing, resulting in a total tax rate of 50%. Previously, the US had imposed a 25% "reciprocal tariff" on Indian goods, effective from August 1, 2025. This time, the US is imposing an additional 25% punitive tariff on India for continuing to purchase Russian oil. In a report, Goldman Sachs stated, "Taking into account the latest US tariff developments, their macroeconomic impact, and capital flows, we believe the rupee will continue to be under pressure in the short term and lag behind other arbitrage and Asian currencies." Goldman Sachs economists estimate that the actual comprehensive tariff rate on Indian goods by the US has now reached around 32%. The high tariffs imposed by the US on India may inhibit key industries such as textiles, gemstones, and jewelry from exporting. A slowdown in export growth could drag down India's GDP growth, weakening portfolio inflows and further increasing depreciation pressure on the rupee. Data shows that foreign investors withdrew $2.4 billion from the Indian stock market over the past three trading days, including nearly $950 million withdrawn on the day the rupee hit a historic low last Friday. The continued outflow of funds is expected to increase the volatility of the Indian currency and stock market.