India, June 1 -- The Indian rupee has been caught in a crossfire of rising crude costs and foreign capital outflows, hovering in the 94.95 to 95.00 range against the US dollar before briefly touching 96.83 in late May. What began as a familiar tug-of-war between equity rebalancing inflows and importer dollar demand has turned into something more sustained, a structural drain rooted in India's heavy dependence on crude oil imports.

The Oil Trigger Global crude prices have surged roughly 26 percent, largely on the back of the escalating US-Iran conflict in West Asia. India imports more than 85 percent of its crude oil requirements, which means this is not a distant geopolitical development; it lands directly on the current account. The Ind...