At the NDTV Profit Conclave 2026, Chief Economic Adviser V. Anantha Nageswaran projected a notably optimistic outlook for the Indian rupee, arguing that the currency is poised to strengthen in the coming years particularly on the back of India's new trade agreement with the United States.
Responding to a question on whether the rupee could reverse its recent slide and benefit from improving foreign flows, the CEA said he sees the trade pact as a key turning point for investor sentiment. “I personally think that the rupee will be one of the big beneficiaries of this trade agreement with the United States,” he said.
Nageswaran explained that both direct and portfolio investors had been wary in recent months due to concerns that “China plus one” strategies were shifting unfavorably. “For them this was a stumbling block… this damaged the sentiment quite significantly,” he said.
With the uncertainty now eased, he expects renewed portfolio enthusiasm and stronger capital inflows. "To the extent that this barrier is removed, I do believe that the Indian rupee in 26–27 will be one of the beneficiaries," he added.
On whether the currency could fully retrace its recent depreciation, Nageswaran remained cautious but upbeat. “It's difficult to give you a precise number… but we will definitely at least see the rupee not following a one-way path towards weaker levels,” he said.
He also stressed that, when viewed over longer time horizons, the rupee's performance is not unusual. “If you take the last five-year view or since the millennium… the Indian rupee has not been an outlier in terms of depreciating against the US dollar,” he stated.
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