The Indian rupee is expected to open sharply higher on Tuesday, supported by hopes that the recently announced India-US trade deal will attract foreign capital and ease hedging pressures.
The 1-month non-deliverable forward indicates the rupee may trade in the 90.15–90.25 range versus the U.S. dollar, after settling at 91.5125 on Monday.
The deal, announced by US President Donald Trump following a call with Prime Minister Narendra Modi, dismantles a punitive tariff system that had pushed duties on Indian exports to 50%, the highest in Asia. By removing penalties related to India’s Russian energy purchases and lowering reciprocal tariffs to 18%, foreign capital inflows are expected to return, following record equity outflows in 2025.
“The trade deal removes a chunk of policy and tariff uncertainty that had been weighing on Indian assets, opening the door for a near-term bounce in the rupee and equities via sentiment and foreign flows,” said Marc Velan, head of investments at Lucerne Asset Management in Singapore.
The rupee was the worst-performing Asian currency in 2025, declining nearly 5% for the year and more than 2% last month, highlighting the significance of renewed investor confidence.
