The rupee depreciated 52 paise to close at 87.43 (provisional) against the U.S. dollar on Wednesday (July 30, 2025), on uncertainty over an India-U.S. trade deal after U.S. President Donald Trump hinted at tariff rates of around 20-25% ahead of the deadline of August 1, 2025.
Forex traders said month-end dollar demand from importers and sustained foreign fund outflows weighed on the local unit.
At the interbank foreign exchange, the domestic unit opened at 87.10 against the greenback and touched an intraday low of 87.05 against the greenback.
At the end of Wednesday’s (July 30, 2025) trading session, the local unit settled at 87.43 (provisional), down 52 paise over its previous closing price.
On Tuesday (July 29, 2025), the rupee declined to an over four-month low and closed 21 paise weaker at 86.91 against the US dollar.
“Indian rupee tanked sharply on uncertainty over India-US trade deal after US President Donald Trump hinted at tariff rates of around 20-25% ahead of the deadline of August 1,” Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said.
Mr. Choudhary further said, “We expect the rupee to slide further amid uncertainty over the trade deal between India and the US. Rising global oil prices and foreign outflows may also keep the rupee under the leash.”
Moreover, investors remained on the sidelines ahead of the US Federal Reserve and Bank of Japan's monetary policy decision this week.
“Traders may take cues from Q2, 2025 GDP, ADP non-farm employment and pending home sales data from the U.S. Investors may remain cautious ahead of the US FOMC meeting and Bank of Japan’s monetary policy decision,” Mr. Choudhary said, adding that the USD-INR spot price is expected to trade in the range of 87-87.90.
In the domestic equity market, the 30-share BSE Sensex advanced 143.91 points, or 0.18%, to close at 81,481.86, while the Nifty rose 33.95 points, or 0.14%, to settle at 24,855.05.
Foreign institutional investors (FIIs) offloaded equities worth ₹4,636.60 crore on a net basis on Tuesday (July 29, 2025), according to exchange data.
According to traders, the lingering trade deal between India and the U.S. may continue to weigh on the rupee. If the discussions fail or get delayed, Indian exporters could face fresh pressure — adding to the rupee’s challenges.
However, if a deal is reached, it could offer a much-needed breather.
Meanwhile, U.S. President Donald Trump has said the trade deal with India is not finalised, as he stressed that India imposes more tariffs than almost any other country. Asked if the deal with India has been finalised, he said, “No, it’s not.”
He was also asked about reports that India is preparing to face higher US tariffs at 20-25%, to which he replied, “I think so”.
U.S. team will visit India on August 25 for the next round of negotiations for the proposed bilateral trade agreement between the two countries.
Though the team is coming at the end of next month, both sides remain engaged to iron out differences for an interim trade deal before August 1, which marks the end of the suspension period of tariffs imposed by US President Donald Trump on dozens of countries, including India.
The prospects for an interim deal may look dim, as U.S. Trade Representative Jamieson Greer has said more negotiations will be needed with India on a trade pact. However, officials are not ruling out the possibility of a last-minute breakthrough.
Indian exporters may face an additional duty of 16 per cent -- on top of the existing 10%, if the August 1 deadline is not extended further or an interim deal is not reached between the two countries.
