Why is Indian Rupee Valuated so low against the US Dollar?

On 11th June 2013, Indian Rupee touched a record low of 58.96 to a Dollar. Till 1975 India followed a fixed rate system, also known as ‘pegged currency system’ or ‘Bretton Woods System’. Most countries abandoned this system in 1973. India abandoned it in 1975 and moved to ‘floating exchange system’ in which the value of the currency is determined by the forces of demand and supply.

1)  Why Devaluation?
When Rupee is devalued, Americans can buy a lot more Indian goods with $1 i.e. our exports increase. China intentionally devalues its currency Yuan in order to keep exports high and thus increasing its Foreign Exhchange (Forex) Reserve.
But there’s also a flip side to this:- India imports a lot of crude oil from the Middle East. Now assume a hypothetical scenario where 1$=400Rs. You’ll have to pay nearly four times the amount that you are currently paying for oil. This leads to inflation. So, too much of  devaluation is bad.