Indian stocks surge after US agrees tariff cuts under trade deal

Following tariff cuts by Trump, the Indian rupee is witnessing a significant surge. The rupee strengthened by about 1.2 percent today. The rupee is at its strongest against the US dollar in over three years. The rupee's surge is due to the agreement on a trade deal between the US President and PM Modi. The reduction in tariff rates has also boosted it.

India Rupee Rallies

According to Bloomberg, the Indian currency has strengthened the most since 2021. On Tuesday, the rupee strengthened by 1.2% against the dollar to 90.40 after US President Donald Trump said he would cut tariffs on Indian goods from 50% to 18%. This deal has reduced higher tariffs on Indian exports, removing a major uncertainty that was weighing on the currency.

Rupee sees biggest surge in 3 years

The rupee emerged as Asia's weakest currency in 2025, weakening by almost 5% over the year and falling by more than 2% in January alone. Limited foreign capital inflows and strong dollar demand from importers increased pressure on the currency. Kunal Sodhani, Head of Treasury at Shinhan Bank India, told Mint that the trade deal has removed a major pressure point that was impacting capital flows. The reassessment of risk by foreign investors has strengthened sentiment-based demand for the INR.

Summary

The rupee strengthened by about 1.2 percent today. The tariff cuts, along with the agreement on a trade deal between PM Modi and Trump, have also strengthened the Indian currency.