The Rupee Is Near ₹96 to the Dollar. Should Indian CEOs Be Rethinking Their 2026 Plans?

The rupee is now hovering uncomfortably close to ₹96 against the US dollar.

On August 21, it was trading around ₹95.69, after touching ₹95.75 earlier this week. The Reserve Bank of India has been actively intervening in the foreign-exchange market, while higher crude oil prices and continued demand for dollars from Indian importers are keeping pressure on the currency. (Reuters)

For most people, ₹96 is a headline.

For a CEO, it is a planning assumption.

A weaker rupee changes the cost of imported raw materials, machinery and technology. It affects dollar-denominated debt, overseas travel and expansion budgets. It can help exporters, but even there the benefit depends on how much of their input cost is imported.

And when Brent is simultaneously trading close to $94 a barrel, the pressure becomes more complicated. India is paying more dollars for an important import at precisely the time those dollars are becoming more expensive in rupee terms. (Reuters)

So I don’t think the useful question for business leaders is whether the rupee will touch ₹96.

The more important question is: what happens to the business if it stays around these levels for longer than expected?

₹96 is psychologically important. The direction matters more.

There is a tendency to attach enormous significance to round numbers in currency markets.

₹80 felt significant when India first crossed it. Then ₹85 did. ₹90 certainly did. Now ₹96 is attracting attention.

But businesses should be careful about managing around a number rather than managing around an exposure.

A company does not suddenly become vulnerable because USD/INR moves from ₹95.90 to ₹96.10. The vulnerability was already sitting in its procurement contracts, foreign-currency borrowing, import dependence and pricing structure.

What the exchange rate does is expose it.

This is why I would not recommend that businesses tear up their 2026 plans because the rupee is approaching ₹96.

I would recommend that they stress-test those plans.

If the budget assumed ₹90 or ₹92 to the dollar, what happens at ₹96?

What happens at ₹98?

And more importantly, what happens if the currency stays weak for six months rather than six weeks?

Those are very different questions.

Importers are where the pressure becomes visible first

For an importer, the mathematics is straightforward.

Suppose a company imports $10 million worth of equipment or materials.

At ₹90 to the dollar, that costs ₹90 crore before other expenses.

At ₹96, the same purchase costs ₹96 crore.

Nothing about the machine changed. Nothing about the raw material improved. The company is simply paying ₹6 crore more because of the currency.

Multiply that across a large manufacturing business importing machinery, electronics, speciality chemicals, energy products or critical components, and currency movement stops looking like something for the treasury department alone.

It becomes an operating issue.

Businesses then have a limited number of choices. They can absorb the additional cost and accept lower margins, pass it to customers through higher prices, negotiate with suppliers, increase local sourcing, hedge their exposure, or redesign parts of the business.

None of those decisions is painless.

And that is why currency risk eventually reaches the CEO’s desk.

Oil makes the current situation more difficult

The rupee’s weakness cannot be viewed independently of what is happening in energy markets.

Brent crude has risen more than 12% over the past two weeks and was trading just below $94 on August 21 as geopolitical tensions continued to create concerns about supply. (Reuters)

For India, an oil importer, this creates a familiar problem.

Higher oil prices increase the country’s demand for dollars. That can put pressure on the rupee. A weaker rupee then makes every dollar of imported crude more expensive.

The impact eventually travels further.

Fuel and freight costs can rise. Petroleum-linked inputs become more expensive. Industries using chemicals, plastics, paints, packaging and other crude derivatives can feel the pressure. Inflation risks can increase, potentially influencing interest rates and household spending.

That is why oil and currency often become one conversation for Indian businesses.

The risk is not simply ₹96.

It is ₹96 combined with expensive energy and uncertain geopolitics.

The RBI has considerable firepower, but businesses should not outsource their risk management

There is an important counterweight.

India’s foreign-exchange reserves have climbed back above $700 billion, helped partly by policy measures that attracted nearly $57 billion in foreign-currency inflows. The RBI has also been consistently active in the currency market, with state-run banks selling dollars on its behalf to limit volatility. (Reuters)

That provides India with a substantial buffer.

And importantly, the RBI’s intervention appears to be aimed at preventing disorderly currency movements rather than defending an arbitrary exchange rate.

For businesses, however, there is an important distinction.

The central bank can manage volatility in the currency.

It cannot manage an individual company’s foreign-exchange exposure.

That responsibility remains with management.

If a company has large unhedged dollar liabilities, excessive dependence on imported inputs or contracts that leave no room to adjust prices, no amount of macroeconomic stability removes that underlying vulnerability.

A strong national balance sheet should never become an excuse for a weak corporate one.

Exporters should not celebrate too quickly either

A weaker rupee is usually presented as good news for exporters.

Sometimes it is.

An Indian company earning $100 million overseas receives more rupees when those dollars are converted at ₹96 than it would at ₹90.

But modern supply chains make the equation less straightforward.

An exporter may import components, machinery, software or raw materials. It may have overseas subsidiaries with dollar expenses. Competitors in other countries may also be experiencing currency movements.

The real benefit depends on the company’s net foreign-exchange exposure, not simply the fact that it earns dollars.

The same applies to India’s technology services industry. Dollar revenues can provide a currency tailwind, but wage costs, overseas operations, hedging contracts and client pricing all influence how much of that benefit reaches the bottom line.

Currency depreciation does not automatically create competitiveness.

At best, it creates an advantage that well-run companies can use.

There is a bigger opportunity hidden inside the pressure

One of the more constructive questions CEOs can ask during a period like this is whether their currency exposure reveals something structural about the business.

If a company becomes dramatically less profitable every time the rupee weakens, perhaps the issue is not the rupee.

Perhaps it is the business model.

Could more components be sourced domestically?

Could suppliers be diversified?

Could contracts include mechanisms for significant currency movements?

Could borrowing be better matched to the currencies in which revenues are earned?

Could energy consumption be reduced?

Could inventory and procurement decisions become more responsive?

These changes cannot be made overnight. Localising a supply chain, in particular, is much harder than announcing that it should be localised.

But currency shocks have a useful habit of showing companies exactly where their dependencies are.

The best management teams use that information.

Planning for one exchange rate is no longer enough

For years, annual planning exercises could comfortably use a base-case currency assumption and build budgets around it.

That approach is becoming less useful in a world where geopolitics, oil prices, capital flows and interest-rate expectations can change quickly.

I believe businesses increasingly need to plan around ranges rather than points.

A base case.

A stress case.

And a severe but plausible case.

The objective is not to predict the rupee perfectly. Nobody can.

The objective is to know in advance what decisions become necessary under different circumstances.

At what exchange rate does a product need repricing?

When does a hedge become appropriate?

At what point does an overseas investment become unattractive?

How much margin compression can the balance sheet tolerate?

Which capital expenditure projects still make sense if imported machinery becomes 5% or 10% more expensive?

Answering those questions before the currency moves gives management options.

Answering them afterwards usually gives management constraints.

India’s long-term story has not suddenly changed

It is also important not to confuse currency weakness with economic weakness.

India continues to have substantial foreign-exchange reserves, a large domestic market and significant long-term growth potential. The government has also moved this week to make rupee-denominated export settlements eligible for the same trade-policy benefits as foreign-currency earnings, part of a broader attempt to encourage greater use of the rupee in international trade. (Reuters)

Over time, deeper domestic manufacturing, greater energy independence and more rupee-based international trade could reduce some of India’s exposure to external currency shocks.

But those are long-term structural changes.

Companies have to operate in the economy that exists today.

And today, the rupee is near ₹96, Brent is close to $94, and geopolitical uncertainty remains high. (Reuters)

That deserves attention without creating panic.

So, should CEOs rethink their 2026 plans?

Not necessarily.

But they should certainly test whether those plans still work under the world that is emerging.

A business plan that works only at ₹90 to the dollar is not much of a plan when the currency is approaching ₹96.

The same applies to oil, interest rates, supply chains and geopolitical risk.

Leadership in uncertain periods is not about predicting exactly what happens next. It is about building enough flexibility that the organisation can respond when the prediction is wrong.

The rupee approaching ₹96 is therefore less important as a currency milestone than as a management test.

For Indian CEOs, the question is not whether ₹96 becomes ₹97 or returns to ₹94.

The better question is:

How much of our strategy depends on the world behaving exactly as we expected it to?