Will Indian rupee fall extra attributable to Trump’s reciprocal tariffs? Specialists say… – Firstpost
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Whereas India’s high-tariff charge places it on the threat of dealing with reciprocal tariffs, the end result shouldn’t be but clear as implementation will probably be a multi-step course of over a number of quarters, involving negotiations and counter-tariffs
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Reciprocal US commerce tariffs proposed by President Donald Trump are unlikely to have a big destructive bearing on the rupee, the pinnacle of world international change at Jefferies stated.
Final week, Trump unveiled plans to levy reciprocal tariffs on all international locations which have tariffs on US items or arrange non-tariff limitations to restrict US entry to their markets.
Analysts reckon the levies might hamper exports comparable to petrochemicals and prescription drugs, which make up about one-fifth of India’s exports to the US.
The tariffs can also hit Asia’s third-largest economic system the place development has already turned sluggish. India was the tenth largest exporter to the world’s largest economic system in 2024.
Nonetheless, the menace “shouldn’t be sufficient to maneuver the forex or for the market to reprice any form of important forex adjustment,” Jefferies’ Brad Bechtel stated in an interview on Tuesday.
“We had far greater tariffs applied on China, and there was little or no affect.”
India charged a weighted common tariff of about 11 per cent in 2023, round 8.2 share factors increased than US tariffs on Indian exports, in accordance with estimates from Citi.
The international locations have agreed to begin talks to clinch an early commerce deal and New Delhi has promised to purchase extra US oil, fuel and navy tools and combat unlawful immigration after Indian Prime Minister Modi met with Trump in February.
Whereas India’s high-tariff charge places it on the threat of dealing with reciprocal tariffs, Bechtel stated the end result shouldn’t be but clear as implementation will probably be a multi-step course of over a number of quarters, involving negotiations and counter-tariffs.
“Will it affect the quantity that India can export to the US? All of it is determined by what could be substituted away versus not however I simply don’t see it being a cloth affect to the rupee,” he stated.
The rupee is amongst Asia’s worst-performing currencies in 2025 and slipped to a report low of 87.95 in February.
Jefferies expects the forex to weaken steadily in direction of 88 by mid-2025 and 89 by the top of the 12 months.
