According to analysts, surging crude oil prices have emerged as major fears for India in form of fiscal slippage and inflationary pressure.

"The rupee and other emerging currencies that rely on huge crude imports have been spooked by this turn of events as the ripple effects on currency are two-fold: an increase in imported inflation i.e. rising CPI and a hit on the trade deficit," Rajesh Cheruvu, Chief Investment Officer, Validus Wealth was quoted as saying by news agency Press Trust of India (PTI).

Crude oil benchmark, Brent Futures, surged by almost 20 per cent to $71.95 per barrel (intra-day) on Monday after twin drone attacks on Saturday wiped out more than half of Saudi Arabia's crude supply.

Brent Futures saw some moderation and was trading at $66.63 per barrel, up 10.59 per cent over the previous close.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.13 per cent to 98.38.

Heavy selling in domestic stock markets and sustained foreign fund outflows also weighed on the domestic currency, analysts said.

The Sensex fell 262 points or 0.7 per cent to close at 37,123 and the Nifty 50 index dropped 72 points or 0.65 per cent to shut shop at 11,004.

"Nirmala Sitharaman announced new measures for boosting economy on Saturday but positive impact on rupee was negated by the negative development of spike in brent crude prices," HDFC Securities Head PCG and Capital Markets Strategy V K Sharma was quoted as saying by PTI.

On Saturday, Finance Minister Nirmala Sitharaman unveiled over Rs 70,000 crore of measures for exporters and the real estate sector.