A guard walks past the National Stock Exchange building in Mumbai, India, on February 9, 2018.
Danish Siddiqui | Reuters
India’s benchmark Nifty 50 stock index rose 5% on open Tuesday, after New Delhi and Washington announced a long-awaited trade deal that saw a sharp cut in U.S. tariffs on Indian exports.
U.S. President Donald Trump on Monday stateside said that U.S. will cut reciprocal tariff on India to 18% from 25%. He added that India will reduce its tariff and non-tariff barriers against the U.S. to zero.
The U.S. had levied 50% tariffs on India, including a 25% levy for purchasing Russian oil. Reuters reported earlier that the overall tariff had been reduced to 18%. Trump said that during his call with Indian Prime Minister Narendra Modi, India agreed to stop buying Russian oil and instead “buy much more” from U.S.
Modi, in his post on X, said that “made in India” products will now face reduced tariffs of 18% in the U.S. while extending support for U.S. president’s efforts to usher global peace, stability and prosperity.
At the beginning of 2025, India was expected to be among the first countries to sign a trade with the U.S. and the lack of an “explicit deal” created a “rift between India’s robust macros and the weak performance of different asset classes,” Citi Research said in its report on Tuesday.
The reduction in tariffs has come in “materially better than consensus expectations,” said Trideep Bhattacharya, president, equities, at Edelweiss Asset Management.
“When combined with the recently concluded India–EU trade agreement, this potentially represents one of the strongest external growth stimuli for the Indian economy in 2026,” she added.