A security guard walks past the National Stock Exchange building on February 9, 2018 in Mumbai, India.
Danish Siddiqui | Reuters
India’s Nifty 50 stock index rose 5% at the open on Tuesday after New Delhi and Washington announced a long-awaited trade deal that sharply cut US tariffs on Indian exports.
US President Donald Trump on Monday announced that the US will reduce tariffs on India from 25 percent to 18 percent. He said that India would reduce tariff and non-tariff barriers against the US to zero.
The US imposed a 50% tariff on India, including a 25% tariff on Russian oil. Reuters previously reported that the overall tariff had fallen to 18%. Trump said in a conversation with Indian Prime Minister Narendra Modi that India had agreed to stop buying Russian oil and “buy a lot” from the US instead.
In his post at X, Modi said “Made in India” products will now face 18% reduced tariffs in the US, while extending support to the US president’s efforts to bring about global peace, stability and prosperity.
India is expected to be among the first countries to sign a trade deal with the US by early 2025, and the lack of a “clear deal” has “created a gap between India’s robust macros and weak performance across asset classes,” Citi Research said in a report on Tuesday.
Traideep Bhattacharya, president of equities at Edelweiss Asset Management, said the rate cut was “better than consensus expectations”.
“Combined with the recently concluded India-EU trade agreement, this represents one of the strongest external growth drivers for the Indian economy in 2026,” he added.