Crude down 24%, FPIs invest ₹53,739 crore: GTRI explains what's driving rupee recovery

India's rupee could strengthen further as falling crude oil prices and renewed foreign investor inflows ease pressure on the country's external finances, according to the Global Trade Research Initiative (GTRI). The think tank expects the currency to settle around ₹92–93 against the US dollar over the coming months if favourable conditions persist.

The improvement comes as Brent crude prices have declined nearly 24%, while foreign portfolio investors (FPIs) have returned to Indian equities after substantial withdrawals in October.

Crude oil prices fall 24%, easing India's dollar demand

According to GTRI, Brent crude prices declined from $118 per barrel on October 30 to $90 on November 10, marking a reduction of $28 per barrel.

For India, which depends heavily on imported crude oil, the decline could significantly reduce the country's energy import bill and demand for US dollars.

Since international oil purchases are largely settled in dollars, cheaper crude means Indian importers require fewer dollars to finance the same volume of imports.

This could help ease pressure on the rupee while improving India's external trade position.

GTRI attributed the decline in crude prices partly to easing geopolitical risks following political developments in the United States and Israel that reduced immediate concerns about further military escalation involving Iran.

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The think tank also highlighted the importance of restoring energy shipments through the Strait of Hormuz and the Red Sea route via Bab el-Mandeb.

Improved movement of crude oil, liquefied petroleum gas (LPG) and liquefied natural gas (LNG) could ease supply constraints and reduce the risk of another energy price spike.

FPIs return with ₹53,739 crore investment

Another major factor supporting the rupee is the sharp turnaround in foreign portfolio investment.

GTRI noted that FPIs purchased a net ₹53,739 crore worth of Indian equities between November 2 and 9, reversing net withdrawals of ₹34,843 crore recorded in October.

The renewed inflows have increased dollar availability in domestic financial markets, helping support the Indian currency.

The turnaround coincided with turbulence in US technology and artificial intelligence stocks, where a sharp sell-off reportedly erased approximately $2.5 trillion in Nasdaq market value on November 5.

However, whether the correction directly triggered increased foreign investment in India remains uncertain.

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Can the rupee strengthen to ₹92–93 per dollar?

The rupee appreciated to ₹93.65 against the US dollar on November 11, gaining approximately 0.3% during the session and reaching its strongest level in more than six months.

The currency has recovered considerably from levels of ₹97–98 per dollar recorded in March 2026.

GTRI expects the rupee to settle around ₹92–93 over the next few months if crude prices remain subdued and foreign investment inflows continue.

However, renewed geopolitical tensions, rising oil prices or another reversal in foreign investor sentiment could weaken the recovery.

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