The Indian rupee slid to 95.62 per US dollar on Monday, marking its weakest level in more than a month.
The currency's depreciation was driven by a sharp rise in crude oil prices following renewed military exchanges between the United States and Iran.
Tehran announced it had closed the Strait of Hormuz, a critical global energy chokepoint, intensifying fears of immediate supply disruption.
The move reverses the modest gains the rupee had seen in recent sessions as energy costs began to ease.
The sudden spike in oil prices has re-exposed India's vulnerability to external supply shocks, given the country's heavy reliance on imported crude.
The currency's slide tracked broader weakness across emerging market assets as investors reassessed geopolitical risk premiums.