The Indian rupee has plunged to a historic low against the UAE dirham, while the US dollar presents a mixed scenario. Although some goods have become cheaper, rising production and transportation costs in India often neutralize the currency benefits.
The rupee’s record low against the Emirati currency and the US dollar is marked at 24.6 against the dirham and 90.4 against the dollar.
Shuaib Alhammadi, director of community relations at Union Coop, sees this as a chance to increase imports from India due to their competitive pricing.
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“Recently, we’ve observed a price drop in some items compared to last year, such as red onions, with decreases up to 10% in some cases. This trend started with fresh products and is expected to extend to consumer goods,” stated Alhammadi.
India remains a major trading partner for the UAE, with non-oil bilateral trade reaching $38 billion (Dh139.46 billion) in the first half of 2025. Trade has surged following the Comprehensive Economic Partnership Agreement (CEPA) signed in May 2022. The UAE imports a range of consumer goods from India, including rice, fruits, vegetables, textiles, and jewelry.
India is a key source market for large UAE retailers like Union Coop, Al Adil Trading, and Al Maya Group.
‘Currency Advantage Offset’
Dr. Dhananjay Datar, chairman and managing director of Al Adil Trading, notes that the rupee’s decline creates complications for importers.
“A weaker rupee might initially suggest cheaper imports for the UAE. However, increased production costs in India—covering raw materials, labor, fuel, and transport—often negate these benefits. Consequently, the final landed cost of many items continues to rise. This is particularly evident in essential foods, which are part of daily household needs. Our focus remains on ensuring a steady supply and stable pricing for the community,” he explained.
India’s Purchasing Manufacturing Index (PMI) fell to a nine-month low in November, indicating weaker factory output.
Kamal Vachani, group director and partner at Al Maya Group, says the weaker rupee has a mixed impact. “For UAE importers, it can lower some costs, making Indian products more competitive. However, the overall impact depends on supplier pricing, raw material costs in India, and global demand. So, the effect is neither wholly positive nor negative,” he remarked.
Vachani highlighted that the rupee’s decline hasn’t led to significant price hikes. “Some categories remain stable, while a few items have seen slight adjustments of around 3-7% due to global commodity prices and logistics. Price changes are more influenced by production costs than currency shifts,” he said.
Products Affected
Vachani added that goods like rice, spices, pulses, and FMCG products might experience slight price changes if supplier costs rise. “Overall, the weaker rupee doesn’t directly cause price hikes; other market factors are more influential,” he noted.
Dr. Datar added that staples like lentils, flour, spices, and everyday FMCG items have experienced consistent inflation due to rising input costs in India.
“Despite some relief from the exchange rate, manufacturers’ costs, along with logistics and compliance fees, result in higher retail prices. We try to absorb these increases to protect customers, but some price adjustments are inevitable,” Dr. Datar, known as the “Masala King” for his strong presence in the spice industry, explained.
Dr. Datar foresees prices of premium spices, edible oils, branded packaged foods, ready-to-eat items, ghee, and select FMCG products being more susceptible to increases.
