This development is likely to improve the country's balance of payments (BOP) gap, strengthen the rupee, and increase foreign exchange (FX) reserves and attract foreign institutional investors (FIIs) who had been waiting on the sidelines.
FinTech BizNews Service
Mumbai, 2 February 2026: US PRESIDENT Donald J. Trump today announced to have agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%.
Commenting on the latest US Tariff announcement Nilesh Shah, MD, Kotak Mahindra AMC, states tonight:
“India US trade deal has gone through ups and downs like a roller coaster. While devil is in the details, it removes a hanging sword over rupee, equity and rates market.
Let us hope that it is a win-win deal for both the countries as they have lot to gain through cooperation.”
Deepak Agrawal, CIO – Debt, Kotak Mutual Fund, explained:
“The reduction in tariff on Indian exports to the US is indeed a welcome move, expected to boost India's economy. This development is likely to improve the country's balance of payments (BOP) gap, strengthen the rupee, and increase foreign exchange (FX) reserves and attract foreign institutional investors (FIIs) who had been waiting on the sidelines. Additionally, Indian equities have become more attractive as their valuation premium has narrowed over the past year. This positive macroeconomic outlook is also expected to keep interest rates stable.”
