The Indian rupee gained value thanks to Prime Minister Narendra Modi’s tax cuts plan, boosted by a rise in local stock markets. The rupee closed the day up 0.23% against the dollar at 87.35.
Stock markets also saw a strong rise: Nifty 50 rose 1% to 24,876 points, Sensex rose 0.84% to 81,273 points.
This was the strongest daily increase for Nifty since June 2025. New Delhi plans to replace the current 12% and 28% taxes with a new system of only 5% and 18%. This move is expected to boost consumption and attract foreign investor interest again. Meanwhile, the possibility of a Russia-Ukraine peace, which arose after US President Donald Trump’s meeting with Putin, could provide additional support to the rupee. According to analysts, a potential breakthrough could push Trump to reconsider the additional 25% tariff on Indian goods.For now, while futures premiums and volatility expectations remain unchanged, the rupee’s trajectory largely remains dependent on US-India trade relations.
