DBS Group Research economist Radhika Rao notes that India’s markets reacted with cautious optimism after a US court ruling against tariffs, with the Indian Rupee posting a modest relief rally from near the 91-per-Dollar level. She explains that earlier US tariffs on India were cut from 50% to 18%, and that post-ruling India’s tariff treatment reverts to MFN plus a 15% umbrella levy for 150 days, while key sectors remain exempt and overall additional economic lift is likely limited.
Rupee steadies as tariff overhang eases
“As the region absorbed the fallout from the weekend’s U.S. court ruling against the tariffs, markets reopened on Monday with a tone of cautious optimism.”
“The Indian rupee staged a modest relief rally, recovering after hovering near the 91-per-dollar mark on Friday.”
“Earlier in the month, the US tariff on India had already been reduced from a steep 50% to 18% following the conclusion of the first tranche of the bilateral trade agreement between the two countries.”
“In light of the court ruling, the earlier reciprocal tariff of 18% (under IEEPA) is now likely deemed invalid.”
“With the recent reduction in tariffs on India already easing the overall tariff burden ahead of the court ruling, additional economic lift might not be significant.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/inr-cautious-relief-after-us-tariff-ruling-dbs-202602241943
