The Indian Rupee's trajectory will be significantly influenced by the specifics of the anticipated India-US trade agreement, according to Reserve Bank of India (RBI) Governor Sanjay Malhotra. Speaking on Friday, February 6, 2026, Malhotra emphasized that the "fine print" of the deal would be crucial in determining the Rupee's movement.

The Rupee experienced a notable surge following the initial announcement of the trade deal, strengthening by 124 paise to reach 90.27 per dollar on February 3rd. However, on Friday, it weakened by 37 paise, closing at 90.73 against the dollar.

Details of the proposed agreement indicate that the US would reduce its reciprocal tariffs on Indian goods from 25% to 18%, while India would eliminate tariffs and non-tariff barriers on US goods. Furthermore, reports suggest the removal of the 25% penalty tariff on Russian oil imports. Commerce Minister Piyush Goyal announced on Thursday that a joint statement regarding the trade deal is expected within the next four to five days.

Governor Malhotra highlighted the potential for the India-US trade deal, along with the recently concluded India-EU Free Trade Agreement (FTA) and other trade pacts, to bolster exports in the medium term. India has already signed trade agreements with the UK and Oman, and the agreement with the European Free Trade Association (EFTA) has taken effect since October 1st. Trade deals with New Zealand and the European Union have also been finalized.

Malhotra stated that India's strong and healthy macroeconomic fundamentals, including a robust external sector, position the country favorably. India's current account deficit decreased to 1.3% of GDP in the September quarter, down from 2.2%.

The RBI Governor also addressed broader economic factors, stating that India's economy remains robust despite global challenges, supported by stable inflation and consistent growth. The Monetary Policy Committee (MPC) has decided to maintain the repo rate at 5.25% while maintaining a 'neutral' policy stance. The MPC meeting, held between February 4th and 6th, acknowledged that global uncertainty and geopolitical tensions present risks to the outlook.

Malhotra anticipates sustained growth momentum, driven by the landmark trade deal with the European Union and the anticipated agreement with the US. He also noted that services exports are expected to remain resilient. Overall, the RBI anticipates a 7.4% real GDP growth in 2025-26.