The Trump trade has pushed the rupee to a fresh low this week and we think further weakness lies ahead. But big moves in the currency are unlikely given the prospect of FX intervention by the RBI. Further ahead, the focus for Indian policymakers will be on the second Trump administration's approach to trade - all the signs points to a mercantilist shift. While a universal tariff of 10-20% on US imports could dent the chances of India becoming a more important link in global supply chains, a 60% tariff on goods from China could actually increase them.
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