2026.02.0218:04:05UTC+00Indian Rupee Rebounds on US Tariff Slash

The Indian rupee appreciated to 90.5 against the US dollar, recovering from the historic low of 92 recorded on January 28th. This strengthening occurred after the United States announced a reduction in tariffs on Indian imports. In a recent agreement between US President Trump and Indian Prime Minister Modi, tariffs on Indian goods were reduced from 50% to 18%, following Prime Minister Modi's declaration that India would cease purchasing oil from Russia. These developments are expected to bolster the export prospects of Indian textiles, machinery, and raw materials, which are frequently exported to the United States, thereby addressing the foreign exchange flow imbalance that had exerted pressure on the rupee in recent quarters. Last week, the rupee had dipped to unprecedented lows due to a surge in oil prices that heightened domestic demand for the dollar among major energy importers in India. This currency pressure was further intensified by the unprecedented INR 17.2 trillion borrowing outlined in the new federal budget.