India's Reserve Bank has implemented stringent measures to support the rupee, which has recently hit new lows due to geopolitical tensions, particularly the Iran war. The RBI's actions, including capping banks' daily currency positions and restricting offshore derivatives, have resulted in the rupee gaining over 2% to 92.66 per dollar. However, these measures have also raised alarms among global investors about the predictability and transparency of India's currency policies. Analysts warn that the RBI's intervention could roll back a decade of liberalization that made India more attractive to foreign investors, especially following the 2013 taper tantrum. Banks are now facing potential losses estimated at up to ₹5,000 crore (approximately $539 million), and foreign investors have already reduced their bond holdings by nearly $1 billion. The RBI's recent actions reflect a deteriorating external economic environment, including rising oil prices and increased tariffs from the US. While RBI Governor Sanjay Malhotra insists that these measures are temporary and do not signify a shift in policy, the long-term impact on foreign investment remains uncertain.