Chief Economic Adviser V Anantha Nageswaran on Friday said the Indian rupee is likely to emerge as one of the major beneficiaries of the India–US trade deal, as improved market access and reduced trade barriers
help restore investor confidence.
Speaking at the NDTV Profit conclave, Nageswaran said the agreement removes a key uncertainty that had weighed on foreign investors, particularly around whether the global “China plus one” strategy was truly evolving into an “India plus one” approach.
Under the trade deal, reciprocal tariffs have been slashed to 18% from 50%, and additional duties on Indian exports have been withdrawn, moves expected to support growth and improve sentiment toward Indian assets.
“For foreign investors, this was a stumbling block because questions were being raised about whether China plus one was becoming India plus one,” Nageswaran said, adding that portfolio flows were also affected by such concerns.
He said the removal of this barrier could help the rupee recover. “This damaged sentiment quite significantly, and to the extent that this barrier has now been removed, I do believe that the Indian rupee in 2026–27 will be one of the beneficiaries of this trade agreement and retrace a lot of the losses that we’ve seen,” he said.
The chief economic adviser also expressed confidence that the rupee is unlikely to weaken further. “I do believe that we will at least see the rupee not following a one-way path towards a weaker level,” he said, while cautioning that multiple global and domestic factors would continue to influence currency movements.
Referring to the Economic Survey, Nageswaran noted that over longer time horizons whether the past five years or even longer the rupee has not been an outlier in terms of depreciation against the US dollar, suggesting its performance remains broadly in line with global trends.
Overall, he said, the trade agreement with the United States could mark a turning point for investor sentiment toward India and provide meaningful support to the rupee in the coming years.
