New Delhi, Dec 4 (NationPress) The Indian rupee has crossed the critical threshold of 90 against the US dollar; however, this decline is not indicative of weakness, according to a recent report released on Thursday.

The findings from SBI Research suggest that the recent fall is primarily influenced by global uncertainties, delays in the US-India trade negotiations, and capital outflows from foreign portfolios, rather than any weakening of India's economic fundamentals.

The report identifies three main factors contributing to the rupee's recent decline: uncertainty surrounding the India-US trade agreement, foreign capital withdrawals following two years of robust inflows, and the Reserve Bank of India's deliberate decision to minimize excessive intervention in the currency market.

Moreover, the offshore non-deliverable forward (NDF) market is witnessing increased activity, while the US dollar index appears to be strengthening.

Contrary to popular belief, concerns related to a widening trade deficit are not entirely accurate, according to the report.

From April to October, India's goods and services deficit was recorded at $78 billion, only marginally higher than the $70 billion seen in the same timeframe last year.

Analysts argue that negative perceptions regarding trade statistics have been overstated.

Since April 2, when the US imposed significant tariff increases on several countries, the Indian rupee has depreciated about 5.5% against the dollar — a steeper decline than most major global currencies.

The 50% tariff rate levied on India surpasses the tariffs imposed on China, Vietnam, Indonesia, and Japan.

The report indicates that this is a significant factor contributing to the current downward pressure on the rupee, despite India’s ongoing efforts to diversify its exports and establish new free-trade agreements.

Approximately $45 billion worth of Indian exports, primarily in labor-intensive sectors, are anticipated to be directly affected by the US tariffs, the report concludes.