Former NITI Aayog vice chairman Rajiv Kumar has used the rupee’s slide toward 90 per dollar to challenge a deeply held belief in India’s policy and public discourse: that a “strong” currency is automatically a sign of a strong nation. Instead, he argues, a controlled, gradual depreciation can act as a powerful tailwind for growth, jobs and exports rather than a symbol of weakness.
What Rajiv Kumar is actually saying
In his post on X, Kumar urged people not to panic about the rupee’s fall and wrote that there is “nothing to worry about rupee depreciating against major world currencies.” He called the old notion of a strong rupee equalling national strength “outdated” and said a softer currency is “good for the economy” because it encourages labour‑intensive exports, boosts foreign exchange earnings and generates more jobs, especially at the lower end of the income ladder.
His message comes at a time when market commentary is fixated on the rupee breaching the psychologically important 90‑per‑dollar level in intraday trade, fuelling headlines that equate the move with macroeconomic stress or policy failure.
Nothing to worry about Rupee depreciating against major world currencies. In fact it good for the economy as it encourages labour intensive exports from India, increases foreign exchange earnings and generates more jobs. High time that a so called ‘strong Rupee’ is seen as the… https://t.co/FJk96VOt91
— Rajiv Kumar (@RajivKumar1) December 2, 2025
How a weaker rupee can help exports
When the rupee depreciates against the dollar, the price of Indian goods and services, measured in foreign currencies, effectively falls—provided firms don’t immediately raise dollar prices to protect margins. That makes Indian products cheaper for overseas buyers and can tilt orders toward India, particularly in sectors where cost is a key differentiator.
The export baskets that can benefit most are exactly the ones Kumar mentions implicitly: labour‑intensive, price‑sensitive industries such as textiles and garments, leather, footwear, handicrafts, gems and jewellery, low‑to‑mid‑end manufacturing, and segments of agriculture and food processing. These sectors collectively employ tens of millions of workers and are crucial for absorbing India’s surplus semi‑skilled labour. A somewhat weaker rupee, if combined with adequate infrastructure and trade facilitation, can give them an edge against competitors in Bangladesh, Vietnam or parts of Africa.
Why more exports mean more foreign exchange and jobs
Higher export volumes translate into more foreign exchange earnings in the form of dollars, euros or other hard currencies. That, in turn, adds to the country’s foreign exchange reserves and can actually strengthen macro stability by giving the Reserve Bank of India a bigger cushion to manage volatility.
At the firm level, increased export orders translate into higher capacity utilisation and, eventually, fresh hiring. Because labour‑intensive exporters rely heavily on human effort—for stitching, finishing, packaging, basic assembly and so on—growing order books can trigger sizeable additions to their workforce. For a country like India, where job creation remains a central challenge despite solid headline GDP growth, this link between rupee competitiveness and employment is what Kumar wants policymakers to focus on.
Challenging the “strong rupee, strong nation” narrative
Kumar’s post also tries to reframe how India thinks about currency strength. For years, public debate has celebrated rupee appreciation as a symbol of economic prestige, even when it squeezed exporters and led to widening trade deficits. In contrast, many of the world’s most successful export‑led economies—China, Japan, South Korea, among others—have historically been comfortable with maintaining relatively competitive, sometimes undervalued, exchange rates to support their manufacturing and export bases.
The key distinction is between orderly, policy‑consistent depreciation and a sudden, disorderly collapse triggered by balance‑of‑payments stress or loss of investor confidence. Kumar is clearly talking about the former: a gradual, market‑plus‑policy‑driven adjustment that improves price competitiveness without undermining stability.
Why depreciation is a tool, not a crisis signal
None of this means rupee weakness is cost‑free. Depreciation makes imports—especially crude oil, fertilisers, high‑end machinery and some food items—more expensive in rupee terms, which can feed into inflation and hurt consumers. It also raises the burden of foreign‑currency debt for companies that have borrowed heavily in dollars. That is why most central banks, including the RBI, try to avoid both sharp one‑way moves and perceptions of a deliberate devaluation.
Kumar’s point is that, in a balanced macro framework, a softer rupee can be one of several tools used to support export competitiveness and employment, alongside structural reforms, logistics upgrades, trade agreements and industrial policy. Instead of treating any move past a round number like 90 as a crisis signal, he suggests India should ask how to leverage the shift: by identifying sectors that can scale exports quickly, improving export credit and hedging access for MSMEs, and ensuring imported inflation remains under control through targeted interventions.
The bigger policy takeaway
In essence, Rajiv Kumar is arguing for a more nuanced, growth‑oriented view of the exchange rate. A rupee that is too strong for too long can hollow out manufacturing and job‑rich exports, while a moderately weaker, well‑managed currency can act as a silent subsidy for Indian producers trying to win global market share.
For founders, exporters and policymakers alike, the message is to look beyond headline‑driven anxiety and focus on how exchange‑rate movements interact with real‑economy goals: boosting labour‑intensive exports, earning more foreign exchange, and turning India’s demographic dividend into actual, on‑the‑ground employment.
Read this: Why China Grew Faster Than India in the Last 30 Years? Explained by Billionaire Harsh Goenka
