The rupee depreciated 28 paise to 95.64 against the U.S. dollar in early trade on Wednesday (June 3, 2026), after the U.S. Trade Representative proposed 12.5% additional duties on India and 53 other countries over forced labour import violations.

Forex traders said the U.S. Trade Representative’s action, amid fresh hostilities and stalled talks between the U.S. and Iran, weighed on investor sentiment.

At the interbank foreign exchange market, the rupee opened at 95.43 against the U.S. dollar, then touched 95.64 in early trade, down 28 paise from its previous close.

On Tuesday (June 2, 2026), the rupee depreciated 17 paise to close at 95.36 against the U.S. dollar.

The U.S. Trade Representative has proposed imposing 12.5% additional duties on 54 countries, including India, for failing to prohibit the import of goods produced with forced labour.

The action follows investigations launched against 60 countries over what the USTR described as their failure to impose and effectively enforce bans on imports made with forced labour.

India has denied the allegations under the forced labour clause and asked the U.S. to end the investigations, saying such matters should be addressed within the framework of ongoing bilateral trade negotiations.

The USTR statement said 54 countries, including India, China, Japan, Brazil, Australia, the U.K., and Saudi Arabia, have failed to impose and effectively enforce a prohibition on the importation of goods produced with forced labour.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.24, up 0.03%, as safe-haven buying syndrome returned but kept the index well within a small range of 99 to 99.25.

Brent crude, the global oil benchmark, was trading higher by 0.82% at $96.79 per barrel in futures trade.

On the domestic equity market front, Sensex tanked 699.74 points to 73,959.48 in early trade, while the Nifty dropped 177.40 points to 23,302.50.

Investors are also monitoring developments in West Asia and awaiting key economic data from the U.S., which could set the path for fresh clues from the U.S. Federal Reserve on the interest rate path, said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

Mr. Bhansali further added that market participants are now turning their attention to the RBI MPC rate decision on June 5, as inflation, growth and the rupee are under focus.

Foreign institutional investors offloaded equities worth ₹8,362.92 crore on a net basis on Tuesday (June 2, 2026), according to exchange data.

The rupee traded in a tight range and fell 5 paise to 87.63 against the U.S. dollar, with depreciation pressures still lingering amid persistent trade uncertainty and a firm U.S. dollar backdrop.

Forex traders said the rupee is trading in a narrow range as the Reserve Bank of India is protecting it at around the 87.95 level, while sustained foreign fund outflows are dragging the local unit lower.

At the interbank foreign exchange market, the rupee opened at 87.56, then touched an intraday low of 87.63 against the U.S. dollar in initial trade, lower by 5 paise from its previous close.

On Thursday (August 7, 2025), the rupee settled 14 paise higher at 87.58 against the U.S. dollar.

“The Indian rupee was largely unchanged in Thursday’s (August 7, 2025) session, holding its ground despite fresh headwinds from additional U.S. tariffs. Steadying moves from the central bank likely helped contain volatility, even as global cues turned less friendly for emerging market currencies,” CR Forex Advisors MD Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.27% to 98.13.

Brent crude, the global oil benchmark, was down 0.17% at $66.32 per barrel in futures trade.

“Given the prevailing conditions, the rupee may attempt a pullback toward the 87.50 range in the near term. Immediate support lies at 87.20 — a decisive break below this level would be needed to signal a meaningful shift in trend. On the upside, resistance is seen at 87.70, with depreciation pressures still lingering amid persistent trade uncertainty and a firm U.S. dollar backdrop,” Mr. Pabari added.

On the domestic equity market front, the Sensex declined 242.24 points to 80,381.02 in early trade, while the Nifty dropped 54.85 points to 24,541.30.

Foreign institutional investors (FIIs) offloaded equities worth Rs 4,997.19 crore on a net basis on Thursday (August 7, 2025), according to exchange data.

Meanwhile, U.S. President Donald Trump has ruled out the possibility of trade negotiations with India until the issue of tariffs is resolved.

“No, not until we get it resolved,” Mr. Trump said in the Oval Office on Thursday (August 7, 2025) in response to a question on whether he expects increased trade negotiations with India since he has announced 50% tariffs on the country.

Last week, Mr. Trump had announced 25% reciprocal tariffs on India that came into effect from August 7, 2025.

The U.S. President also signed an executive order slapping an additional 25% levy on India for New Delhi’s purchases of Russian oil, bringing the total duties to 50%, among the highest imposed by the U.S. on any country in the world.

The additional 25% duty will come into effect after 21 days or August 27.