A new research report from the economic department of State Bank of India has said that the rupee will depreciate sharply following Donald Trump’s election as the next US President, is unfounded.
“During the Trump 1.0, rupee depreciated by 11 per cent, less than it depreciated during Biden term... While a stronger dollar might result in short-term capital outflows for short-term as investors flock to dollar-based assets, on a positive note, a lower rupee might provide an export advantage, potentially boosting revenues in sectors like textiles, manufacturing, and agriculture,” said the report titles US Presidential Election 2024: How Trump 2.0 impacts India’s and Global Economy.
While the report acknowledged that Trump’s victory introduces a mix of challenges including increased tariffs, H-1B restrictions, it also presents India with long term incentives to expand its manufacturing, diversify export markets, and enhance economic self-reliance.