A Sharp Decline Over The Past Year
The Indian rupee has fallen significantly against the Pakistani rupee over the past 12 months, raising fresh questions about India’s currency performance and broader economic management.
On May 15, 2025, one Indian rupee was worth 3.2913 Pakistani rupees. By May 18, 2026, that rate had fallen to 2.9010 Pakistani rupees. That represents a depreciation of approximately 11.86%, including a 6.8% decline in 2026 alone.
Pressure Beyond Global Dollar Strength
The decline suggests that India’s currency weakness cannot be explained only by the strength of the U.S. dollar or by the crisis in West Asia. If external pressure were the sole factor, similar effects would likely be visible across regional currencies in a more uniform way.
Instead, the rupee’s persistent weakness against the Pakistani currency points to concerns about domestic policy, investor confidence and structural challenges within the Indian economy.
India Trails Regional Currencies
The Indian rupee was among the weakest-performing currencies in Asia in 2025 and has continued to struggle this year. It has also weakened against the Bangladeshi taka over the same period.
The exchange rate moved from 1.42 taka per rupee to 1.28 taka per rupee, a decline of nearly 10%. This regional comparison strengthens the argument that India’s currency pressure reflects more than broad global volatility.
Pakistan Comparison Raises Questions
The rupee’s decline against the Pakistani rupee is especially notable because Pakistan entered another International Monetary Fund program in 2025 and was forced to adopt strict fiscal and monetary measures.
Despite Pakistan’s own economic constraints, the Indian currency continued losing ground. That contrast has made the exchange rate a politically sensitive indicator, especially given Prime Minister Narendra Modi’s past criticism of currency weakness before he came to power.
Modi’s Past Statements Resurface
As a prime ministerial candidate in 2012 and 2013, Modi repeatedly criticized the UPA government over the falling rupee. He argued that a weak currency reflected poor governance and failure at the national level.
He also used strong nationalist language on Pakistan, presenting himself as a leader who would defend India’s interests more forcefully. The current data sits uneasily beside those earlier claims, as the rupee has now weakened even against Pakistan’s currency over a full year.
International Concern Grows
A recent Financial Times article on rising caution around Modi’s government also pointed to the falling rupee as a source of public frustration. The currency’s weakness has increased the cost of foreign education, overseas business and travel for Indian households and companies.
International analysts have also warned that the rupee’s decline is not purely tied to global events. In March, Japanese bank MUFG said the rupee was likely to keep falling through the end of the year, regardless of developments in West Asia, with global shocks affecting only the scale of the decline. For investors, the currency’s performance has become a key test of India’s economic resilience and policy credibility.
