New Delhi: The Indian rupee strengthened sharply in early trade on Tuesday, rising 119 paise to 90.30 against the US dollar after Washington reduced tariffs on Indian exports from 50 per cent to 18 per cent.
Currency market participants said the tariff rollback has significantly improved India’s trade outlook and could revive foreign institutional investor interest in domestic assets. The lower duty places India in a relatively stronger position compared to some neighbouring economies, potentially boosting export competitiveness.
At the interbank foreign exchange market, the rupee opened at 90.30, marking a strong recovery from its previous close of 91.49 against the dollar.
Commenting on the development, Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said the US-India trade agreement marked an important shift after months of uncertainty. He noted that the revised tariff rate gives Indian exporters an edge and could encourage FIIs to return to Indian equity markets after prolonged selling pressure.
Bhansali added that market participants would closely watch the Reserve Bank of India’s approach in the coming days, particularly its response to dollar movements and liquidity conditions.
In global markets, the dollar index, which measures the US currency against a basket of six major currencies, was down 0.20 per cent at 97.43. Brent crude prices also eased, slipping 0.41 per cent to USD 66.03 per barrel in futures trade.
Domestic equity benchmarks reflected the positive sentiment. The Sensex surged 2,138.08 points, or 2.62 per cent, to trade at 83,804.54, while the Nifty climbed 607 points, or 2.42 per cent, to 25,695.40.
Despite the upbeat market reaction, foreign institutional investors remained net sellers on Monday, offloading equities worth Rs 1,832.46 crore, according to exchange data.
