The Indian rupee strengthened sharply in early trade on Tuesday, appreciating 119 paise to 90.30 against the U.S. dollar after the United States reduced tariffs on Indian goods from 50% to 18%.
Forex market participants said the lower tariff rate significantly improves India’s relative trade position and could reopen the door for Foreign Institutional Investor (FII) inflows, News.Az reports, citing Indian media.
At the interbank foreign exchange market, the rupee opened at 90.30 against the dollar, marking a gain from its previous close of 91.49.
Commenting on the development, Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said the U.S.–India trade agreement was announced after nearly nine months of delay by Donald Trump and endorsed by Narendra Modi. He noted that the 18% tariff level is slightly lower than that applied to Bangladesh and Pakistan, giving Indian exporters a relative competitive advantage.
Bhansali added that FIIs, who have been persistent sellers for an extended period, may finally begin buying Indian equities. However, he cautioned that market participants should closely watch the stance of the Reserve Bank of India in the coming days, as it may need to intervene by purchasing dollars to manage short positions.
On the domestic equity front, markets rallied strongly. The 30-share Sensex was trading 2,138.08 points, or 2.62%, higher at 83,804.54, while the Nifty 50 rose 607 points, or 2.42%, to 25,695.40.
Meanwhile, Foreign Institutional Investors sold equities worth ₹1,832.46 crore on Monday (February 2, 2026), according to exchange data.
