Weakening Rupee Pressures Indian Multinationals Amid Rising Dollar Debt and Import Costs

The Indian rupee has weakened to 84.20 per U.S. dollar as of March 11, 2026, marking a 3.7% decline year-to-date and a 12% drop over the past 12 months. This depreciation is amplifying the financial burden for Indian multinationals with substantial foreign-currency liabilities. Reliance Industries Ltd. (RELIANCE.NS), with over $18 billion in foreign debt, and Tata Elxsi Ltd. (TATAELXSI.NS), which relies heavily on imported semiconductor components and equipment, are among the most exposed. The aviation sector, represented by InterGlobe Aviation Ltd. (IndiGo), is similarly vulnerable, with fleet operations dependent on imported aircraft and jet fuel priced in dollars. The impact is already visible in sectoral performance. IndiGo’s aircraft procurement costs have increased by an estimated 15% due to the rupee’s depreciation, while Reliance’s net interest expense on dollar debt rose by 22% in the last quarter. These pressures could trigger earnings downgrades, particularly for firms set to report results in Q4 FY2026. The broader Indian equity market, tracked by the Nifty 50 index, has seen a 4.8% correction since January, with financials and consumer goods stocks underperforming. Market participants warn of potential capital outflows and increased volatility in the USD/INR exchange rate. As foreign institutional investors reassess risk, the cost of debt servicing for Indian corporates may rise further, constraining investment and growth. The Reserve Bank of India is monitoring the situation closely, though no immediate policy shift is expected. Sectoral exposure to currency risk is now a key factor in valuation models across Indian equities.