Allaying fears over the rupee’s drop, Union Finance Minister, Nirmala Sitharaman, said there is no reason to worry since the rupee had not slid against any other currency besides the US dollar.
“The rupee slide is largely against the dollar, not against any other currencies. That's also because of the way globally, the dollar has strengthened,” she said when asked if the slide of rupee against the greenback is a concern.
However, the government continues to keep a watchful eye on the domestic unit’s performance, the minister added.
“This is not the case only with rupee versus dollar, it’s the case with many other currencies versus the dollar. So we are keeping a good watch on this,” Sitharaman told reporters.
Also Read: Rupee falls 12 paise to close at 88.14 against USD
The rupee plummeted to a record low and closed at 88.27 against the US dollar after touching an intra-day low of 88.38 on Friday. While the fall came amid concerns over US tariffs, intervention by the Reserve Bank of India (RBI) through state-run banks helped limit further losses.
Steep tariffs imposed by the US on Indian exports have been among the highest in the world. On August 7, US President Donald Trump enforced an additional 25 per cent penalty on India for buying crude oil from Russia, taking the total tariffs on Indian goods to 50 per cent. The new tariffs have been effective since August 27.
Indian sectors which are impacted due to high import duties include textiles/ clothing, gems and jewellery, shrimp, leather and footwear, animal products, chemicals, and electrical and mechanical machinery. Those that are out of the ambit of these sweeping duties are pharma, energy products and electronic goods.
The US has been the largest trading partner of India since 2021-22, accounting for about 20 per cent of India's USD 437.42 billion worth of goods exports in 2024-25.
In 2024-25, the bilateral trade in goods between the two countries stood at USD 131.8 billion (USD 86.5 billion exports and USD 45.3 billion imports).
Meanwhile, a restructuring of the Goods and Services Tax (GST) system in India has been the talking point since the decision was taken by the GST Council to retain only two of the four tax slabs.
Starting September 22, the first day of Navratras festival, the GST slab structure will tax everyday goods at 5 per cent and there will be an 18 per cent tax slab for everything else. The existing slab of 12 and 28 per cent rates have been done away with. Additionally, bread, milk and paneer will attract no tax at all.
Calling the landmark GST overhaul a 'people's reform', Sitharaman said that rationalisation of tax rates for a wide swath of products will benefit every family, boost consumption, and bolster the economy.
“This is a reform which touches the lives of all 140 crore people. There is no individual in this country who is untouched by GST. The poorest of the poor also have something small that they buy, touched by GST,” she said.
Also Read: New GST regime from Sept 22: 5pc, 18pc continue; 40pc on luxury
The finance minister also said she will personally monitor passing on of GST rate cuts in the form of price reduction even as some of the industries – including car makers to public sector insurance companies – have already announced price moderation.
Nearly 400 products – from soaps to cars, shampoos to tractors and air conditioners – will cost less when the rejig of the GST is effective. Premium paid on individual health and life insurance will be tax-free. A third slab of 40 per cent tax has been earmarked for a small list of sin goods and ultra-luxury items.
Sitharaman said the reform – the single biggest since the 2017 roll-out of the one-nation, one tax regime – has been carried out with a focus on the common man. Every tax on daily use items has gone through a rigorous review and in most cases the rates have come down drastically.
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