Rupee Undervalued: Economic Survey Highlights India's Strong Fundamentals Despite Weakness

• The Economic Survey 2025-26 states the rupee's recent weakness against the US dollar does not reflect India's strong economic fundamentals.
• The Survey attributes the rupee's underperformance in 2025 to external flows and global uncertainty, not domestic macroeconomic deterioration.
• India's economy is projected to grow 7.2% in FY27, supported by contained inflation, healthy banks, and robust corporate balance sheets.
• A balance of payments deficit in H1 FY26 and market uncertainty over a US trade deal contributed to the rupee's depreciation.
• An undervalued rupee offers a strategic cushion against higher American tariffs and rising crude oil prices, but may cause investor hesitancy.

Why It Matters: The Economic Survey asserts the rupee is undervalued, with India's strong economic fundamentals masked by external pressures.