A weak currency theory also gives a leg-up to the BJP-led NDA government's 'Make in India' initiative . There are also murmurs in the government supporting a weak rupee in order to be competitive in the world market. In May, Commerce Minister Nirmala Sitharaman minced no words when she said that a weaker rupee will help exports.
At the time, the rupee was weakening from the 61-62 levels. Today, it has fallen below 64 against the dollar. The rupee has been weakening over the years. It has been falling since 2008 when it appreciated to 40 against the dollar. The Chinese devaluation, though marginal, has created a flutter globally. It will certainly have a negative impact on India's exports. There are some who are predicting a currency war, but RBI Governor Raghuram Rajan won't play ball.
Here is why India will maintain its exchange rate policy: