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The US-India Trade Deal in 2026: What the Tariff Tug-of-War Actually Means for Your Money as an NRI

The US-India deal cut tariffs to 18% in 2026, but the rupee, your Indian IT holdings and your remittances stay exposed. What an NRI should watch.

Rakesh Sinha, NRI Finance WriterReviewed 8 June 202616 min read

In the first week of April 2026, the Nifty 50 fell 5.9% in a single session, its second-largest one-day drop in a decade, after Washington slapped a 26% reciprocal tariff on Indian goods. By the start of June, the same index had recovered, foreign investors were still net sellers for the year, the rupee was hovering near Rs 95 to the US dollar, and a February trade deal that was supposed to settle things had been overtaken by fresh tariff talk. If you are an NRI watching this from Dubai, London, New Jersey or Toronto, the question is not who won the negotiation. The question is what it does to your rupee, your portfolio and the money you send home.

The 30-second answer: In February 2026 the US and India struck an interim trade deal that cut the US reciprocal tariff on Indian goods from 25% to 18% and removed a separate 25% penalty tied to Russian oil purchases. The broader Bilateral Trade Agreement is still being negotiated, and fresh US tariff proposals in June 2026 kept the picture fluid. For NRIs the effects are second-order. Tariffs and trade-balance worries pressure the rupee, which traded near Rs 95 to the dollar in early June 2026. Indian IT exporters are not hit by goods tariffs but are exposed to H-1B and services-trade risk. A weaker rupee raises remittance value today but cuts repatriation value later. Plan around a range, not a forecast.

This is not a geopolitics explainer. There are plenty of those, and most of them will be out of date by the time you finish reading. This is about the handful of money decisions an NRI actually controls: where the rupee leaves you, what your Indian equity and IT exposure is really sensitive to, when to remit, and where the services-trade and visa angle quietly matters more than the tariff headline. I will be honest about what is settled and what is not, because a lot of this is still moving.

What was actually agreed, and what was not

Start with the timeline, because the headlines have been contradictory.

Through the early part of 2026, Indian goods faced a punishing US tariff stack. There was a 26% reciprocal tariff announced in early April 2026, and on top of that a separate 25% penalty linked to India's purchases of Russian oil, taking the effective burden on some Indian exports toward the 50% mark. That combination is what spooked the equity market in April and drove the record foreign-investor selling.

Then, on February 6, 2026, Washington and New Delhi announced a framework for an interim agreement. The headline terms:

The US reduced the reciprocal tariff on India from 25% to 18%.
The additional 25% tariff tied to Russian oil was removed by executive order, in recognition of India's commitment to wind down those oil purchases.
India agreed to eliminate or reduce tariffs on a wide range of US industrial and agricultural goods, including tree nuts, fruit, soybean oil, wine and spirits, and grain by-products, alongside a large US purchasing commitment.

The Indian market liked it. The Nifty 50 closed about 2.5% higher on the announcement, with exporters in autos, textiles and goods-heavy sectors leading.

Here is the part the headlines tend to bury. This is an interim agreement, explicitly framed as a stepping stone to a full Bilateral Trade Agreement (BTA) that the two governments launched negotiations on back in February 2025 and which is still not concluded. And by June 2026, fresh US tariff proposals were back in the news, with reports of new levies of up to 12.5% being floated across roughly 60 countries, India among them. So the honest framing is this: a real deal happened, it lowered the worst-case tariff, and it did not end the uncertainty. Anyone telling you the trade question is "resolved" is selling something.

Why a goods tariff moves your rupee

The tariff is levied on physical Indian goods entering the US. You, an NRI, do not import sandalwood or steel. So why does this sit on your financial radar at all? Because of what tariffs do to the rupee, and the rupee is the exchange rate that prices almost everything you own or send home.

Two channels matter.

The trade-balance channel. Higher US tariffs make Indian exports less competitive in the US market. If India sells less to its largest single export destination, that widens the trade gap and reduces the dollar inflows from exports. Fewer dollars coming in, all else equal, weakens the rupee. The 50%-ish effective tariff earlier in 2026 was a genuine drag on this front. The cut to 18% relieves part of it, which is rupee-supportive at the margin.

The capital-flows channel, which is bigger and faster. Foreign portfolio investors (FPIs) react to trade uncertainty long before the trade data does. When they get nervous about Indian growth or earnings, they sell Indian stocks and bonds, convert the rupees back to dollars, and take the money out. That selling is itself rupee-negative, because it is a wall of rupee-to-dollar conversion. In 2026, foreign investors withdrew an estimated 17 to 18 billion dollars from Indian equities, with trade worries a meaningful part of the story. That outflow is a large reason the rupee slid toward Rs 95 and beyond against the dollar through the first half of the year.

So the tariff matters to you not as a tax on goods but as an input into the USD-INR rate. And on direction, the truth is it cuts both ways right now. The February deal removed the worst tariff scenario, which should steady the rupee. But the deal being interim, the BTA being unfinished, and June's fresh tariff noise all keep nervous capital twitchy. That is why forecasts are all over the place.

The rupee: a range, not a number

As of early June 2026, the rupee traded around Rs 95 to Rs 95.7 to the US dollar, firming a little later in the month as crude prices softened and some geopolitical tension eased.

The year-end forecasts, though, do not agree with each other, and that disagreement is itself the useful signal:

Some bank desks see the rupee strengthening into the high 80s if India lands a favourable final tariff outcome and flows return.
Others see it parked near the 90 to 91 zone, with tariff uncertainty capping any rally.
And the recent trend, if nothing improves, points the other way, toward continued mild weakness past 95.

When the professionals are spread across a 6 to 7 rupee range for the same currency over the same horizon, the lesson is not to pick the smartest forecaster. The lesson is to plan around the range and to make sure no single financial decision of yours depends on the rupee landing on one specific number. I will show you what that looks like in practice in the worked example below.

One honest caveat on the rupee: trade is only one of its drivers. Crude oil prices, the US Federal Reserve's rate path, India's own inflation and rate decisions, and global risk appetite all push it around, sometimes harder than tariffs do. Do not over-attribute every rupee move to the trade deal.

Your Indian equity exposure: where the deal helps and where it does not

If you hold Indian stocks or India-focused funds, the trade deal touches your portfolio unevenly.

Goods exporters benefit from the tariff cut. Sectors that physically ship to the US, such as autos and auto components, textiles, certain engineering and metals names, and gems and jewellery, were the most exposed to the punitive tariff and the most relieved by the cut to 18%. These were among the names that rallied on the February announcement. If you own broad Indian indices, you own some of this exposure already.

The broad market is driven more by foreign flows than by any one sector. The Nifty's 5.9% crash in April and its recovery afterward were primarily a flows story, not an earnings story. FPI selling on trade fear took it down, and a less-bad tariff outcome plus stabilising sentiment brought it back. For a diversified NRI holding an index fund or a large-cap fund, the practical takeaway is that trade headlines drive short-term volatility, not the long-term return, and reacting to each headline is how you lose money.

The IT angle, which is where NRIs get this wrong

Here is the most common confusion I see, and it matters because so many NRIs hold both Indian IT stocks and US tech, often through RSUs.

Indian IT firms are not hit by the goods tariff. TCS, Infosys, Wipro, HCLTech and the rest export software and services, not physical goods. The US reciprocal tariff applies to goods under the Harmonized Tariff Schedule. Services are outside it. So the 18% number has no direct effect on IT billing or margins. If you sold Infosys in a panic in April thinking the tariff would hit it, the tariff was never the right thing to fear.

What you should actually watch on IT is the services and visa channel.

In 2026 a USD 100,000 supplemental fee began applying to certain new H-1B petitions for beneficiaries filed from outside the US. It generally does not apply to extensions, amendments, or change-of-status filings already inside the US, but it materially raises the cost of fresh on-site placements.
Roughly 60,000 of the annual H-1B issuances go to Indians, and the Indian IT delivery model leans on on-site staffing. A higher cost of placing people on-site pressures margins and forces a faster shift to offshore and local US hiring.
This is precisely why IT stocks fell sharply in early June 2026, on visa and services-trade worries rather than on anything in the goods tariff.

So the cross-currents for an IT-heavy NRI are: the goods tariff is a non-issue, the visa and services-trade negotiation is the real risk, and the broad market flow effect sits on top of both. If services trade and visa terms get folded into the final BTA on favourable terms, that would be a genuine positive for Indian IT. That is an open question, not a settled one.

There is a personal layer here too. If you are yourself on an H-1B, the USD 100,000 fee, visa-renewal uncertainty, and the broader services-trade tone affect your own income stability, which affects how much you can remit and how much risk you should carry in your India corpus. That is a more direct hit to your finances than anything in your stock portfolio.

Remittance value: the one place a weak rupee helps you

For most NRIs, the single largest financial flow is the money sent home. The trade-driven rupee weakness is, counterintuitively, good for that flow today.

When the rupee weakens from, say, Rs 90 to Rs 95 to the dollar, every dollar you remit converts into more rupees. The same paycheque covers more of a home loan EMI in India, more of a parent's expenses, more of a SIP. So a tariff scare that drives the rupee down is, in the narrow remittance sense, a tailwind for an NRI sending money home.

The mirror image is the trap. The same weak rupee hurts you when you eventually convert rupees back to dollars, whether you are repatriating savings or planning to draw on your India corpus from abroad. And it quietly erodes the dollar value of your India-side wealth even while it sits there. So "weak rupee good" is only true for the leg where you are buying rupees, not the leg where you are selling them.

Worked example: a tariff-scare rupee move, on remittances and on a portfolio

Let me put numbers on it, because a rule without a number is not finished.

Take Arjun, an NRI in the US who does two things every year. He remits USD 30,000 home for his parents' expenses and his own India SIPs, and he holds an India equity corpus of Rs 50,00,000 in mutual funds.

Scenario A: rupee at Rs 90 to the dollar (a calmer, deal-optimistic world).

His USD 30,000 remittance converts to: 30,000 x 90 = Rs 27,00,000.
His Rs 50,00,000 corpus is worth, in dollars: 50,00,000 / 90 = USD 55,556.

Scenario B: rupee at Rs 95 to the dollar (the early-June 2026 reality, tariff-stressed).

His USD 30,000 remittance converts to: 30,000 x 95 = Rs 28,50,000.
His Rs 50,00,000 corpus is worth, in dollars: 50,00,000 / 95 = USD 52,632.

Look at what the 5-rupee move does. On the remittance leg, the weaker rupee in Scenario B gives Arjun Rs 1,50,000 more for the same 30,000 dollars. That is real money toward his parents' costs and his SIPs. On the corpus leg, the same weaker rupee shrinks the dollar value of his existing India wealth by USD 2,924, from 55,556 to 52,632, even though the rupee number on his statement has not changed at all.

The two effects pull in opposite directions, which is the whole point. If Arjun is mostly in accumulation mode, sending money home and buying more rupee assets, the tariff-driven weak rupee is broadly working for him, and a sharp rupee dip is a reason to front-load a planned transfer, not to panic. If he is near repatriation, planning to bring that corpus back to dollars soon, the same weak rupee is working against him, and that argues for hedging or for spreading conversions over time rather than converting in one shot into a stressed market.

Notice what Arjun does not do. He does not try to predict whether the BTA lands at 12.5% or 18% and trade the rupee on it. He sizes his decision to the leg he is actually on and spreads the timing so no single rate print can wreck the plan.

Edge cases

A few situations where the general read above needs adjusting.

You hold US tech RSUs as well as Indian IT. This is common, and it is a concentration risk hiding in plain sight. Both legs are sensitive to the same global tech sentiment and to US-India services-trade tone, so they can fall together. The trade deal does not diversify this for you. If a single theme moving against you would dent both your salary, your RSUs and your Indian IT holdings at once, that is too much exposure to one story, regardless of the tariff outcome.

You are remitting a large one-off sum soon. A house purchase, a parent's medical event, a big SIP top-up. Here the rupee level genuinely matters because it is a single large conversion. In a fluid tariff environment, splitting the transfer across two or three months is the cautious move. It guarantees you the average rather than betting everything on one day's rate.

You earn in a currency other than the dollar. If you are in the UK, the UAE or Canada, your home-currency-to-rupee rate is driven partly by your currency against the dollar and partly by the dollar against the rupee. The US-India tariff story moves the USD-INR leg directly, but the GBP, AED or CAD leg can offset or amplify it. Do not assume a US-India headline maps cleanly onto your pound or dirham.

You are on an H-1B yourself. The services-trade and visa side of this negotiation is not a portfolio question for you, it is an income-stability question. The USD 100,000 supplemental fee and any tightening of services terms affect your own earning power and renewal certainty. That argues for a larger emergency buffer and for not over-committing future dollar income to illiquid India assets while the rules are in flux.

You hold goods-exporter stocks directly. If you own individual names in autos, textiles or metals rather than a broad index, you are more exposed to the specific tariff number than a diversified holder is. A favourable final BTA helps these directly. An adverse one hurts them directly. Single-stock concentration cuts both ways harder.

The closing read

The 2026 trade story is real news, and I want to be honest about its shape rather than tidy it up. A meaningful deal happened in February: the worst-case tariff stack came off, the reciprocal rate fell to 18%, and the Russian-oil penalty was removed. That genuinely reduced the tail risk that had crushed the Nifty in April. But the agreement is interim, the full Bilateral Trade Agreement is unfinished, and June 2026 brought fresh tariff proposals. The situation is fluid, and it will probably still be fluid for months. Treat anyone who claims certainty here with suspicion.

For an NRI, the disciplined response is boring on purpose. Do not trade the rupee on trade headlines, because even the bank desks cannot agree on where it lands within a 6 to 7 rupee range. Keep remitting on a schedule for the rupee expenses you actually have, and treat a sharp rupee dip as a chance to front-load a planned transfer rather than a reason to gamble. Recognise that your Indian IT holdings are exposed to the visa and services-trade channel, not the goods tariff, so watch the right headline. And if you hold US tech RSUs alongside Indian IT and earn a tech salary, see that concentration for what it is and trim it, deal or no deal.

The closing read: the tariff number is the loud part of this story, but for your money it is mostly an input into the rupee and a sentiment driver for stocks. Position for a range of outcomes, keep your remittance and repatriation decisions tied to the leg you are actually on, and let the negotiators negotiate. Your job is to make sure no single tariff print, in either direction, can damage your plan.

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Disclaimer: This article is general information for NRIs, not personalised investment, tax, currency or legal advice. Trade negotiations, tariff rates and visa rules described here were accurate to the best available reporting as of early June 2026 and are actively changing; verify the current position before acting. Exchange-rate figures and forecasts are illustrative and not predictions. Currency, equity and remittance decisions depend on your own residency, time horizon and risk tolerance. Consult a qualified financial adviser, a chartered accountant and, where visa status is involved, an immigration attorney before making decisions based on this content.

Frequently asked questions

Does the 2026 US-India trade deal affect my Indian IT stocks like Infosys and TCS?

Not directly through tariffs. The US reciprocal tariff applies to physical goods under the Harmonized Tariff Schedule, and IT firms such as TCS, Infosys, Wipro and HCLTech export services, not goods. So the 18% tariff agreed in February 2026 does not hit their billing. The real channel is indirect. The same firms depend on H-1B and on-site delivery, and the new USD 100,000 supplemental H-1B fee on certain fresh petitions, plus general trade uncertainty, has driven sentiment-led selling. IT stocks fell sharply in early June 2026 on visa worries, not tariff worries. If you hold Indian IT, watch the visa and services-trade headlines, not the goods-tariff number.

Will the trade deal make the rupee stronger or weaker against the dollar?

It is genuinely two-sided and unresolved. Lower tariffs reduce one source of pressure on India's trade balance and on foreign-investor nerves, which is rupee-supportive. But the deal is interim, the broader Bilateral Trade Agreement is still being negotiated, fresh US tariff proposals surfaced in June 2026, and foreign portfolio investors had already pulled an estimated 17 to 18 billion dollars from Indian equities this year. The rupee sat near Rs 95 to Rs 95.7 to the dollar in early June 2026. Forecasts for year-end diverge widely, from the high 80s to the low 90s. Treat any single forecast with suspicion and plan around a range.

Should I change when I remit money to India because of the tariff situation?

For most NRIs, no. Trying to time the USD-INR rate around trade headlines is a losing game even for full-time traders. A weaker rupee means each dollar buys more rupees, so it helps when you are sending money home and hurts when you eventually repatriate back. The sensible approach is to keep remitting on a schedule for rupee expenses you actually have, and to treat any sharp rupee fall as a chance to front-load planned transfers rather than as a reason to gamble. If you have a large one-off transfer, splitting it across a few months smooths out the headline risk.

Rakesh Sinha, NRI Finance Writer

Rakesh Sinha is a technology professional and an NRI since 2016. He holds a master’s from Carnegie Mellon University and a BTech in Computer Science from IIT Guwahati, and has worked at Microsoft, Cisco, InMobi and Google across Bengaluru, the United States and London. He has personally navigated the decisions these guides cover: moving foreign salary and tech-company RSUs across borders, opening NRE, NRO and FCNR accounts, filing Indian returns as a non-resident, and claiming DTAA relief between the US, UK and India. How these guides are written and reviewed.

Disclaimer: This guide is educational and general in nature. It is not individual financial, tax, or legal advice. Tax and FEMA rules change and your situation may differ, so confirm specifics with a qualified chartered accountant or financial adviser before acting. See our editorial standards for how these guides are researched, reviewed and updated.