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Indian economy, recognised as one of the major developing economies in the globe, witnessed severe volatility of its currency, the Indian Rupee, in 2012. The value of rupee had depreciated to an all time low of INR 57.37 vis-a-vis the US dollar in June 2012. Numerous internal as well as external factors like large fiscal and industrial deficits, inadequate GDP and GNP growth, insufficient foreign exchange reserves, high inflation rate, slow agricultural growth and production, recession in Euro zone and Japan, poor balance of trade condition, volatility in international oil and gold price, bilateral and multilateral socio-economic relations with other nations, deficient foreign direct investment and portfolio investment, etc were attributed as the possible causes for the depreciation of Indian rupee. As a result of rupee depreciation, the cost of imported goods had become expensive. A depreciating rupee had made the import of crude oil costlier, resulting in an increase in the operating expenses of the oil companies. A constant increase in import prices of crude oil had stimulated the petrol prices as well. To counter the rupee volatility, both the government and Reserve Bank of India had taken several necessary steps such as, modifying the rule of portfolio investment to attract foreign investment into the Indian economy, intervening the sudden short-term movements in the rupee value, encouraging exporters for depositing their foreign exchange earnings in the economy, appealing banks to offer higher interest rate on Non-Resident Indian capital deposit etc. Therefore, it remained to be seen how the Indian economy would conquer the rupee depreciation crisis in future.