- The India-US trade deal is expected to benefit the Indian rupee significantly, said the CEA
- The trade deal cuts US tariffs from 50% to 18% on Indian exports
- The rupee is not expected to weaken further, said the Chief Economic Adviser
The Indian rupee is going to be one of the big beneficiaries of the India-US trade deal, Chief Economic Adviser V Anantha Nageswaran believes, as the country gears up for wider access to key American markets.
This is because foreign investors often faced the question of whether the 'China plus one' strategy was becoming the 'India plus one' strategy, among other issues, the top official said at the NDTV Profit conclave.
The trade deal slashes reciprocal tariffs to 18% from 50% and withdraws additional duty on Indian exports, in what is expected to boost the Indian economy.
"For foreign investors, this was a stumbling block because questions were raised about whether China plus one was becoming India plus one, etc, and portfolio flows also, apart from other considerations, you know, evaluations, no AI story, etc," said Nageswaran.
The CEA said the barrier has now been removed and will benefit the rupee.
"This damaged the sentiment quite significantly, and to the extent that this has been removed. This barrier is removed. I do believe that the Indian rupee in 2026-27 will be one of the beneficiaries of this trade agreement with the US retrace a lot of the losses that we've seen," added Nageswaran.
The CEA, in particular, appeared optimistic that the rupee would not weaken further.
"I do believe that we will definitely at least see the rupee not following a one-way path towards a weaker level, but again, as I said, there are other things that are also happening simultaneously. In the economic survey, we pointed out that if you take the last five years or the last millennium, the Indian rupee has not been an outlier in terms of depreciating against the US dollar," the senior official added.
