Not losing sleep over it, says CEA on falling rupee
Chief Economic Adviser V Ananta Nageswaran at the CII IndiaEdge 2025 in New Delhi on Wednesday
On a day when rupee crossed 90 a US dollar, Chief Economic Adviser V Anantha Nageswaran sought to calm market nerves over the sharp depreciation by saying that the government is not losing sleep over it.
“It will come back next year. Right now, it’s not hurting our exports or inflation. I am not losing my sleep over it. If it has to depreciate, now probably is the right time,” CEA V Ananta Nageswaran told reporters on the sidelines of the CII IndiaEdge 2025 on Wednesday. The rupee hit a historic low of 90.21 (provisional) against the US dollar on Wednesday, raising fears of inflation.
The steepest fall
In 2025, the rupee depreciated over 5 per cent against the US dollar. The depreciation of rupee comes amid foreign institutional investor (FII) outflows and sustained buying of dollars by banks. The Indian currency is seeing its steepest annual decline since 2022 and making it the worst-performing Asian currency.
Nageswaran said the rupee’s performance must be viewed against a global backdrop of rising US interest rates, geopolitical strains and tighter financial conditions. “The rupee has been remarkably stable relative to many emerging-market currencies over the last two to three years,” he said, adding that the government expects conditions to improve in 2026.
Nageswaran linked the rupee’s recent volatility to shifts in global capital flows, noting that foreign direct investment patterns have undergone a structural change, with outbound investments by Indian companies rising in response to supply-chain localisation and strategic diversification.
On FDI target
Speaking about gross foreign direct investment (FDI) target, Nageswaran said, “We may cross $100 billion this year.” During the first six months of the current fiscal, total FDI, which includes equity inflows, reinvested earnings and other capital, increased to about $50 billion as against $42.3 billion in the same period of 2024-25. India’s gross FDI inflows for the FY25 were approximately $81.04 billion, a 14 per cent increase over the previous fiscal year.
The gradual increase in net FDI numbers after 2014 and until the Covid-19 pandemic has now run into geopolitical and geo-economic challenges, Nageswaran said. “That explanation should not stop there. We are aware that we have to crank up our game,” he said.
The government needs to address tax and non-tax issues, infrastructure-related issues, and also last-mile connectivity issues to increase FDI into India, he said. The nature of the terrain has shifted when it comes to FDI over the last few years, the CEA said. .Post Covid-19, some of the countries started focussing on localisation of production rather than depending completely on foreign nations leading many companies to move their investment in those jurisdictions, he added
Published on December 3, 2025
