Top News

Indian markets open bullish on trade deal optimism: Market participants cheered a jointly announced ‘Interim Trade Agreement’ between India and the US this week that provided tariff certainty for several export-oriented industries. Globally markets have reacted positively and Wall Street stocks closed near all-time highs on trade optimism ahead of India open. India and the US announced the deal framework late Friday evening which will serve as both a stepping stone towards negotiating a broader Bilateral Trade Agreement (BTA) and providing near-term certainty on tariff rates market access and NTBs. Tariff Certainty Opens Market Opportunity Under the interim agreement India agreed to the US charging a reciprocal tariff rate of 18% across most goods imported from India. The move reduces the punitive tariffs levied by the Trump administration last year during heightened trade tensions. Key sectors which gain from improved tariff competitiveness include textiles engineering leather goods apparel and certain segments of machinery. Broking firms have reported positive reactions from export-heavy sectors like gems & jewellery pharma and textiles on visibility into tariffs and earnings. Markets have also priced in hopes that reduced trade uncertainty could drive greater foreign institutional investor interest following tepid FII inflows in recent months due to broader macro uncertainty. Stock Picks: Pharma Companies & Export-Orienters Brokerages strategists advise looking towards stocks with significant exposure to the US market and capabilities to ramp exports. Broking firm Axis Securities has tipped Pharma IT textiles engineering and industrial goods sectors to outperform in the short-term. “Beneficiaries of the deal will likely include export-oriented and manufacturing-linked sectors as an important overhang has been removed with tariff certainty” noted Ashish Dasgupta senior VP & equity strategist at IDBI Capital Market. Dasgupta went on to predict upward earnings revisions in select mid-cap and small-cap stocks. Opposition Industry Cheers & Jeers Indian Trade Deal While investors are optimistic Indian politicians and industry chambers have voiced both praise and criticism after tariff concessions were agreed to last Friday. Some politicians have raised concerns that tariff concessions could disadvantage domestic industries without simultaneous guarantees particularly small farmers and MSMEs. Opposition politicians have called for safeguards on tariffs and quotas on the agricultural sector. The concerns were raised during question hour in both houses of Parliament on Monday. Industry chambers on the other hand have cheered the reduction in tariffs for several agricultural processing jobs and farm exports. “Reduction in duty on spices processed food horticulture products will make our products more competitive in terms of pricing in the international markets” stated Indian Autoork Sabha President Sunil Jain. Trade Talks Continue Negotiators will continue discussions over the next few months to hammer out a comprehensive BTA. Both sides are expected to focus on digital trade and further opening of services sectors. Investors and exporters will be watching closely for any policy tweaks that could impact market sentiment. Dalal Street will likely find direction from reduced trade policy uncertainty as tariff rates become clearer. Also Read: Donald Trump tariffs and a surprise oil claim: Why the India-US trade deal is grabbing attention across globe