How common it is to decline an accepted offer? What are the repurcsuions attached to it? Have you guys ever done it? How should I communicate to the company? What should I write in email?

Take a page out of the company playbook, quote the market conditions heh

Off topic but keep your title short so that more people would read it

Its common .. companies roll back offers... Employees roll back on accepted offers.. not professy behaviour on either part but that is reality.. just inform that you won't be pursuing this role anymore.. no one can force you irrespective of what the HR might say... No career repercussions.

It is much more common in India than you think and job market is India is like that because money parity is much more than abroad even a difference of Rs 10-20k good make a lot of impact on your life style and Indian HR's understands that, they only get annoyed if they are hiring you for leadership position i.e more than 50lpa. Then small money does not add to your wlb and hence offer hopping would be considered bad. But industries where base salary of is on a higher side like semiconductor this offer hopping acceptable range is even higher to about 70lk to 1.2 cr