Indian Rupee Rises: How the US-India Trade Agreement Repositions the Currency Map

In early February, the trade relationship landscape between the U.S. and India underwent a significant transformation. The announcement of tariff reductions marks a turning point in bilateral negotiations, creating positive ripple effects in Asian markets. The decision resonates not only in trade policies but also in the movements of the Indian currency, which gained substantial ground against the U.S. dollar during morning market operations.

18% Tariff Reduction Marks a New Era in U.S.-India Relations

According to data from Jin10, the Trump administration finalized an agreement that reduces tariffs applied to India to 18%, a move that Lloyd Chan, analyst at Mitsubishi UFJ Bank, describes as “a tangible relief of bilateral tariff tensions.” This realignment represents a major turnaround after months of trade relations filled with uncertainty. The expert emphasizes that such an agreement is not limited to numbers—it signals a redefinition of the political-trade map between the two economic powers, paving the way for renewed investments and trade flows.

Indian Currency Appreciates as Investors Reassess Opportunities

The Indian rupee responded immediately to the new confidence environment. Lloyd Chan notes that the strength of the offshore currency against the dollar reflects investors’ assessment of the relief from key risks that had been pressuring Indian exports. Therefore, the market is not just marking a date on the economic calendar—it is recalibrating its expectations about the region’s trade and currency potential. The dynamics show how trade policy decisions between the U.S. and India are repositioning strategies for global investors.

Market Data: Rupee at Levels Not Seen Since January

Indicators provided by LSEG reveal the magnitude of the movement. The dollar fell 1.0% against the Indian rupee, closing at 90.32 during the session, after touching an intraday low of 90.25—its lowest level since January 15. These numbers are not just figures: they document how renewed confidence in U.S.-India trade agreements materializes into concrete currency reallocations. Reduced volatility and consistent appreciation of the Indian currency indicate that the market is positively absorbing the new trade conditions, anticipating greater stability in bilateral relations.