The rupee was at 83.3575 against the U.S. dollar as of 09:55 a.m. IST, down from 83.1425 in the previous session. The rupee touched an intra-day low of 83.4375 in early trading.
Early trends showed Prime Minister Narendra Modi's alliance is leading, but the tally could fall short of what exit polls predicted, a foreign exchange salesperson at a private bank said.
Indian equity indices, the BSE Sensex and Nifty 50, fell nearly 3% amid nervousness about the election outcome while bond yields climbed.
It is "evident that markets are not too happy in the context of what the exit polls had indicated. You can see it across equities, bonds and FX markets," Kunal Kurani, associate vice president at Mecklai Financial, said.
The rupee's struggles were in contrast to moves in Asian peers, which advanced after weaker-than-expected U.S. manufacturing data spurred a drop in Treasury yields.
Odds of a Federal Reserve rate cut at the September meeting rose.
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