The rupee may experience an 8-10% depreciation against the U.S. dollar during the Trump 2.0 administration, according to a recent SBI research report. The rupee's all-time low of 84.39 against the dollar reflects ongoing challenges, including persistent foreign fund outflows. While short-term volatility is expected, the report suggests that this could be followed by a period of appreciation.

The report also points out that a stronger dollar could result in capital outflows, yet a weaker rupee might provide an export advantage, benefiting sectors like textiles, manufacturing, and agriculture. Furthermore, the impact on inflation from the rupee's depreciation is expected to be minimal.

The report also discusses potential shifts in foreign direct investment (FDI), noting that while regulatory changes under Trump's first term led to a decline in FDI flows, India’s more diversified sources of investment, including sectors like non-conventional energy and medical appliances, could offset any negative effects. Additionally, the possibility of tighter restrictions on H-1B visas could increase costs for Indian IT companies operating in the U.S., leading to higher hiring expenses and potentially affecting margins.

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