India’s Nifty 50 skyrockets 5% as U.S.-India trade deal turbocharges stocks
A guard walks past the National Stock Exchange building on February 9, 2018 in Mumbai, India.
Denmark Siddiqui | Reuters
India’s benchmark Nifty 50 stock index rose 5% at the open on Tuesday after New Delhi and Washington announced a long-awaited trade deal that led to a sharp cut in US tariffs on Indian exports.
US President Donald Trump said on Monday that the US will reduce the reciprocal tariff on India from 25% to 18%. He added that India will reduce tariff and non-tariff barriers to the US to zero.
The US had imposed 50% tariffs on India, including a 25% tax on the purchase of Russian oil. Reuters had previously reported that the overall tariff had been reduced to 18%. During his meeting with Indian Prime Minister Narendra Modi, Trump said India agreed to stop buying Russian oil and instead “buy a lot more” from the United States.
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India is expected to be among the first countries to sign trade with the US by the beginning of 2025, and the lack of a “clear agreement” has created a “gap between India’s strong macros and the weak performance of different asset classes,” Citi Research said in its report on Tuesday.
Trideep Bhattacharya, head of equities at Edelweiss Asset Management, said the reduction in tariffs came “materially better than consensus expectations.”
“Combined with the recently signed India-EU trade agreement, this potentially represents one of the strongest external growth spurs for the Indian economy in 2026,” he added.
