US EditionIndia Gains Edge as US Tariff Deal Lowers Rates Below China, Pakistan, Indonesia
The deal cuts U.S. tariffs on Indian goods to 18%, removing punitive duties and boosting export sectors like textiles and leather by up to 20%, experts say.
- On Tuesday, domestic financial markets are set to react after U.S. President Donald Trump announced a trade deal with Prime Minister Narendra Modi that cuts tariffs to 18% from 50%. India's rupee is set to rally sharply at open.
- A punitive tariff regime had left markets reeling, as the 50% tariff weighed on markets while Foreign Portfolio Investors pulled nearly $12 billion since August 2025.
- Markets showed immediate movement, with the rupee opening sharply stronger at around 90.50 per dollar and 1‑month NDFs in a 90.15–90.25 range; analysts project a 0.1–0.2% FY27 current‑account improvement.
- By slashing tariffs to 18%, the deal is expected to encourage a return of foreign capital, with V Anantha Nageswaran, Chief Economic Advisor, saying it revives the China+1 strategy for FDI inflows.
- Over the medium term, analysts say the deal could add nearly 60 basis points to growth and help trigger a turnaround in FPI flows this year, despite the rupee’s 2025 performance down nearly 5%.
37 Articles
37 Articles
Global Markets Surge as US-India Trade Deal Reinvigorates Investor Confidence
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From 50% tariffs to trade deal: What's behind Trump's change of heart for India?
Donald Trump’s abrupt shift from tariff threats and sharp criticism of India to warm praise for Prime Minister Narendra Modi and a reduced-tariff trade deal has surprised diplomatic and trade circles. What's behind Trump's change of heart for India?
India's tactics seem to work: with relief, the country responds to the lowering of US tariffs on Indian goods. But the details of the deal are open.
Indian rupee, stocks soar in relief rally after trade deal with US
India's financial markets rallied sharply on Tuesday after a trade deal that slashed U.S. tariffs on Indian goods to 18% from 50%, a development that investors said lifts a key overhang over the country's stocks, bonds and currency.
India-US Trade Deal: When the stalled trade deal between India and the United States was finalized, its impact was clearly visible in India. Whether it was gold and silver, the stock market, or the rupee, all saw a sharp rise.
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