The sell-off in the INR in near-term can be seen as opportunity to re-enter long positions in the currency versus the EUR. 

If the oil prices remain low, the improvement in India's current account and fiscal balance should sustain. While other emerging market currencies effected by China's slow down and re-balancing, India is less vulnerable comparatively as it has less share in the exports with China.

Improved RBI's policy credibility improved investor confidence, and India is the fastest growing economy now, with China's growth dropping below 7%.

"FDI has picked up strongly over the past year, and portfolio inflows will likely be sustained. Reform progress has been uneven this year, but we believe the NDA's failure to win Bihar is unlikely to derail the positive direction of reforms", says Barclays in a research note.