The relationship between the values of local currencies in terms of foreign currencies and the export competitiveness of any country is very complex. This relationship will become more complex if there is a heavy dependence on imported resources and low capabilities to export locally produced resources. During the last ten months (since Jan. 2022), the Indian Rupee (INR) has weakened many times and reached a level of INR 80.75 per dollar in Sept. 2022. Indian economy which already suffered from a large fiscal and current account deficit adversely affected by relative exchange rate pressure. This paper attempts to explore the effects of the exchange rate movement in India and its impact on Indian trade and economy. The circumstances which have been created for the economy due to the depreciation of the rupee against the dollar reveal that there has been a strong and significant negative impact of this currency volatility on many sectors.