The rupee's recent moves have truly stunned the market—it hit a new all-time low against the US dollar and is firmly at the top of the list for Asian currency declines in 2025.

To be fair, India's economic data is actually pretty strong, but it can't withstand the heavy tariff blows from Trump. Hopes for trade privileges have been completely dashed, overseas capital is fleeing, and the Indian stock market has taken a big hit.

The Reserve Bank of India had previously burned through foreign exchange reserves to prop up the currency, but it looks like they can't hold out any longer and have basically chosen to lie flat. While currency depreciation theoretically makes exports cheaper, the problem is—global trade protectionism is so fierce, and the economic outlook is so uncertain that international capital only has one attitude toward the Indian market right now: wait and see.

That's just how the capital game works in emerging markets—brutally realistic.