The Indian rupee opened 20 paise lower at ₹87.85 against the US dollar on Monday, weighed down by escalating trade tensions following former U.S. President Donald Trump’s latest remarks targeting India’s oil trade with Russia.
The currency, which closed Friday at ₹87.65, felt immediate pressure as Trump posted on Truth Social criticizing India for “profiteering” off Russian oil amid the ongoing war in Ukraine. Accusing India of reselling Russian oil for “big profits,” Trump declared he would “substantially” increase tariffs on Indian imports to the U.S.
“Trump tweets against India are creating pressure on the rupee,” said Kunal Sodhani, head of treasury at Shinhan Bank, noting a rise in concerns over foreign investment outflows.
The Ministry of External Affairs (MEA) swiftly responded with a six-point rebuttal, asserting that India’s energy decisions are rooted in national interest and security, not geopolitics. The ministry also accused the West of hypocrisy, citing their own expanding trade relations with Russia despite the war.
“The same countries criticizing India had encouraged our imports to stabilize global oil markets,” the MEA said in a late-night statement, referencing earlier US positions in the wake of the Ukraine crisis.
MUFG Bank analysts suggested Trump’s comments may be part of a broader strategy. “Whether this barrage of comments is a negotiation tactic to influence India’s position on the Russia-Ukraine conflict remains to be seen,” the bank wrote in a note.
Amid the growing pressure, traders expect India’s central bank to act. “I’d fully expect the Reserve Bank of India to step in — they won’t want to let the rupee depreciate unchecked, especially in the face of US rhetoric,” a senior trader told Reuters.
Adding to market unease, analysts warned that Trump’s remarks could trigger increased overseas outflows from Indian equities, as investor nerves tighten in the face of a potential U.S.-India tariff war.
While Prime Minister Narendra Modi has not directly addressed the issue, he has reiterated the importance of supporting domestic goods and building economic resilience — signaling India’s intent to weather external pressure without compromising strategic autonomy.
The unfolding situation raises new challenges for Indian policymakers as they navigate a complex landscape of economic pragmatism, diplomatic balance, and currency stability amid intensifying global headwinds.