Rupee likely to gain from India-US trade deal, says chief economic adviser

The Indian rupee is expected to be a major beneficiary of the India-US trade deal, Chief Economic Adviser V Anantha Nageswaran said, citing improved market access and stronger investor sentiment following the agreement.

Nageswaran said the deal would help remove a key hurdle that had weighed on foreign investor confidence.

He noted that investors had raised questions about whether the China plus one strategy was effectively turning into an India plus one strategy, which had affected portfolio flows into the country.

The trade deal cuts reciprocal US tariffs on Indian goods to 18 percent from 50 percent and also withdraws additional duties on Indian exports. The changes are expected to provide a boost to the Indian economy by expanding access to important American markets.

Nageswaran said these concerns had significantly damaged sentiment toward India in the past. With the removal of this barrier, he believes the rupee could recover some of the losses it has seen in recent years. He added that the currency could be among the beneficiaries of the agreement in 2026-27.

The chief economic adviser also expressed optimism that the rupee would not weaken further. He said the currency was unlikely to continue on a one-way path toward depreciation, while acknowledging that other factors were also influencing its movement.

Referring to the economic survey, Nageswaran said that over the past five years, and even over a much longer historical period, the Indian rupee has not been an outlier in terms of depreciation against the US dollar.