New Delhi, May 4 -- There is a discomforting paradox at the heart of India's current macroeconomic situation. By almost every conventional measure of sovereign economic health-growth, inflation, fiscal trajectory, external vulnerability and investor confidence in the real economy-India's fundamentals are among the strongest of any large emerging market.

Yet the rupee has depreciated by over 13% against the dollar in the past two years and by more than 15% since January 2023. If exchange rates are verdicts on fundamentals, India appears to have received an unjust one.

Consider what the scoreboard actually shows.

India's real GDP growth has remained the fastest among major economies, running well above 6% annually even in a difficult glo...