Rupee Surges 119 Paise to 90.30 Against US Dollar as Tariffs Lowered to 18 Per Cent

Mumbai: The Indian rupee opened sharply higher by 119 paise at 90.30 against the US dollar in early interbank trading on Tuesday, driven by overnight confirmation of a significant tariff reduction under the newly announced India-US trade agreement.

The rupee had closed at 91.49 on Monday. Forex dealers attributed the strong appreciation to improved market sentiment following the US decision to lower tariffs on Indian goods to 18 per cent from previous higher levels, which had been as high as 50 per cent in recent months.

The tariff cut was officially confirmed late Monday night after a telephone conversation between Prime Minister Narendra Modi and US President Donald Trump.

Trump first announced the development on his social media platform, Truth Social, describing it as a key “trade deal.” Prime Minister Modi stated on X, “Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement.”

Both leaders hailed the pact as a milestone in strengthening economic relations between the world’s two largest democracies.

Analysts noted that the tariff relief is expected to enhance India’s export competitiveness, reduce input costs for domestic industries, and encourage greater foreign institutional investor (FII) participation in the coming weeks.

Rajeev Juneja, President of the PHD Chamber of Commerce and Industry (PHDCCI), welcomed the move, saying it reflects renewed US commitment to open trade and economic efficiency. “Lower tariffs will help cut business costs, strengthen supply chains, ease inflationary pressures, and improve access to intermediate goods and capital equipment. Sectors such as manufacturing, technology, healthcare, and renewable energy are poised to gain significantly from this development,” he said.

Globally, the US dollar index fell 0.20 per cent to 97.43, while Brent crude futures slipped 0.41 per cent to $66.03 per barrel.

Domestic equity markets reacted strongly to the positive trade news. The BSE Sensex soared 2,138.08 points, or 2.62 per cent, to close at 83,804.54, while the NSE Nifty jumped 607 points, or 2.42 per cent, to 25,695.40.

Despite the upbeat sentiment, foreign institutional investors remained net sellers on Monday, offloading equities worth ₹1,832.46 crore, according to provisional exchange data.

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