Nifty 50 jumps 5% after U.S.-India trade deal

India’s benchmark Nifty 50 stock index surged around 5% at market open after the United States and India announced a major trade agreement that sharply reduces U.S. tariffs on Indian exports.

U.S. President Donald Trump said reciprocal tariffs on India would be cut to 18% from 25%. According to reports citing sources, the overall tariff level, previously as high as 50% when additional duties were included,  has now been reduced to 18%, News.Az reports, citing CNBC.

The tariff reduction followed discussions between Trump and Indian Prime Minister Narendra Modi. Trump said India had agreed to reduce tariff and non-tariff barriers for U.S. goods and increase purchases from the United States.

Modi said products labeled “Made in India” will now face significantly lower tariffs when entering the U.S. market, which is India’s largest export destination.

Markets reacted strongly to the announcement. The Nifty 50 later trimmed gains but remained about 4% higher, putting it on track for its strongest daily performance in nearly six years if gains hold.

Analysts say the agreement could provide a major boost to India’s export sector, investor confidence and overall economic growth. Some experts believe the deal, combined with the recently concluded India–EU trade agreement, could become one of the strongest external growth drivers for India’s economy in 2026.

The announcement also supported the Indian rupee, which strengthened about 1% to around 90.29 per U.S. dollar. The currency had been one of Asia’s weakest performers in 2025 due to capital outflows and the absence of a U.S. trade deal.

India’s stock market had previously underperformed many emerging markets, with foreign investors pulling out funds. Analysts say the new trade agreement could help reverse that trend by improving sentiment and reducing trade-related uncertainty.

Economists say the tariff cuts are likely to support exports, strengthen financial markets and trigger a relief rally in domestic equities, as high tariffs had weighed on investor sentiment in recent months.

News.Az 

By Aysel Mammadzada