Currently, less than 1% of India's trade is conducted on rupee terms. Instead, more than 86% of transactions are made in dollars, leaving India even more dependent on the greenback for trade than the global average rate of 60%.
This dollar overexposure is giving India headaches as the U.S. Federal Reserve tightens monetary policy, and as prices for oil, gas and related products such as chemical fertilizer soar.
Adding to the complications, as much as 44% of the foreign debt of Indian companies is unhedged, leaving them having to dedicate more rupee revenues just to keep up with unchanged dollar payments.
