The Indian rupee surged sharply on Tuesday, climbing ₹1.22 to close at ₹90.27 against the US dollar, its strongest level in three weeks. The boost came after India and the United States unveiled a trade deal aimed at lowering tariffs on Indian goods, a move that traders say has injected fresh confidence into both currency and equity markets.
The deal includes a significant reduction in US tariffs, bringing them down to around 18% from previously higher levels. This is expected to help Indian exporters compete more effectively and open doors for greater trade flows between the two countries. Analysts say the agreement reduces uncertainty for businesses and investors alike, making India a more attractive destination for capital.
Markets responded enthusiastically. The Sensex and Nifty 50 surged more than 2.5%, reflecting widespread optimism among investors. Sectors likely to benefit, such as IT services, pharmaceuticals, textiles, and specialty chemicals, saw strong buying interest, signaling expectations of improved earnings in the months ahead.
Foreign exchange traders noted that the combination of tariff cuts and clearer trade rules prompted foreign investors to bring money back into Indian markets, supporting the rupee’s rapid rise. Many market watchers called it a “confidence booster” for both domestic and overseas investors.
While most reactions were positive, some experts urged caution, noting that the deal’s long-term impact will depend on smooth implementation and global demand conditions. Still, the general sentiment is upbeat, with the agreement seen as a step toward strengthening India-US economic ties and supporting growth in trade and investment.
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