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An interim deal was signed between India and America last Friday. Information about this was given by issuing a joint statement from both the countries. After the announcement of this deal, a spectacular rally was seen in the American stock market. On the same lines, today i.e. on Monday 9th February, the Indian stock market is likely to open at a higher level.

The ITA would be the first step towards a larger bilateral trade agreement (BTA), which would clarify the near-term picture on tariffs and pave the way for deeper trade integration. For investors, this announcement has increased the focus on export-oriented and manufacturing-related sectors, which will benefit from better access to the US market.

Under this framework, the US will impose 18% reciprocal tariff on select Indian goods, which include textiles and clothing, leather and footwear, plastics and rubber, organic chemicals, home decor, handicraft products and some machinery. Additionally, the agreement provides for the potential removal of reciprocal tariffs on a large set of products, which will enhance the competitiveness of Indian exporters. The deal also signals a shift away from uncertainty-filled trade news to a more rules-based framework, which markets generally view as the potential for better earnings.

What changed after Trump-Modi's announcements?

The joint statement adds legal and policy clarity that was missing from earlier social media announcements. According to JM Financial, Indian exports will get preferential tariff rate quota for automobile parts and tariff exemption on certain aircraft components. In return, America will benefit from tariff cuts in many sectors, including food and agricultural products. Along with this, a long-term commitment related to planned purchase of $500 billion in the next five years from India is also included.

Most importantly, the US has legally withdrawn the additional 25% ad valorem duty under Executive Order 14329, which will be effective from February 7, 2026. The executive order also states that India has committed to stop direct and indirect imports of Russian oil, while the purchase of American energy products will be increased.

Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.