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The Indian rupee will regain some lost ground against the U.S. dollar over the next three months, according to a Reuters poll of FX strategists, but a reversal in the currency's fortunes hinges upon India and the U.S. agreeing to a trade deal.

U.S. President Donald Trump's punitive 50% tariff on Indian goods has soured sentiment among foreign investors, who have sold around $17 billion of Indian equities so far this year, pushing the rupee to record-low levels.

Despite the Reserve Bank of India selling dollars in recent weeks and the economy growing at a robust 8.2% in the July-September quarter, the rupee hit a new low of 90.29 per dollar on Wednesday.

The currency is down nearly 5% for the year against the greenback.

Between foreign investors' reluctance to enter Indian equity markets without a U.S.-India trade deal and the RBI's tight leash on the rupee, the currency is expected to move in a narrow range in the near term.

The partially convertible rupee was forecast to rise nearly 1.1% from current levels to 88.91 per dollar by end-February 2026, and then be marginally stronger at 88.83 by end-May, according to the median view of 37 forex analysts polled between December 1-3.

"I was expecting some kind of India-U.S. trade deal to happen by November, and that hasn't happened. But still, the base case is that it should happen before the financial year-end, so that itself will boost the sentiment for the rupee," said A. Prasanna, head of fixed income research at ICICI Securities Primary Dealership.

"The equity flows have been quite erratic, and FDI flows on a net basis have been weak. We don't see anything that tells us that the capital flows can improve on a sustainable basis...But we don't expect this kind of outright depreciation or one-sided pressure on the currency to continue."

The currency was expected to gain nearly 0.3% to trade around 89.65 against the dollar in the coming 12 months, the poll also showed.

(Other stories from the December foreign exchange poll)