The Indian rupee is under renewed pressure following the new tariffs announced by US President Donald Trump. Trump announced a 100% tax on branded medicines and additional tariffs on heavy trucks and furniture, effective October 1.
Following these developments, the rupee is trading near its historical low of 88.80 over the weekend. Analysts suggest that the exchange rate is likely to test the 89 level in the short term.
The US accounts for more than a third of India’s pharmaceutical exports.
Thanks especially to cheap generic drugs, India’s sales to the US increased by 20% to $10.5 billion in fiscal year 2025. However, it is unclear how the new tariffs will affect this trade.On the other hand, strong US economic data is supporting the dollar, while investor expectations for interest rate cuts have decreased. This is accelerating the weakening of the rupee.
According to experts, interventions by the Reserve Bank of India (RBI) may provide limited relief, but volatility in global markets may increase pressure on the rupee in the coming days.
