India's rupee faces sharp depreciation from the West Asian crisis, driven by rising energy prices and reduced capital flows. Weak balance-of-payments, widening CAD, and muted foreign investments are key issues. Although forex reserves have declined, India is macroeconomically better positioned than during previous crises. Still, current foreign investments are weaker. Government and RBI will deploy measures like increased gold import duties and capital inflow incentives to stabilize the rupee, while avoiding interest rate hikes given economic growth concerns.