Indian rupee opens 2 paise higher at 87.58/USD on lingering worries over Trump tariff

Indian rupee

The Indian rupee opened higher by 2 paise on August 1 on likely worries over the impact of US tariff on Indian exports and persistent outflows of foreign investors from Indian equities.

The local currency opened at 87.58 against the US dollar as compared to 87.60 against the greenback at previous close. According to the Bloomberg data, the domestic currency has depreciated 1.70 percent in July.

"The rupee is expected to remain under pressure with a broader trading range seen between 87.25 and 88.00," said Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities.

Economists expect US President Trump’s announcement of a 25 percent tariff and the penalty on Indian imports to affect trade flow, but its impact on GDP is expected to be contained at around 0.3 percentage points. The levy - similar to the 26 percent tariff announced on April 2 under Liberation Day measures - is estimated to have an effect of 0.1–0.3 percent of GDP, as India continues to benefit from supply chain realignments globally.

Crucially, India's exports of smartphones and pharmaceuticals, which together made up nearly one-third of exports in FY25, remain exempt from these new tariffs.

Foreign Portfolio Investors (FPIs) were net sellers to the tune of Rs 5,538.19 crore worth of shares in Indian equities, according to NSE data.