India's Nifty 50 skyrockets 5% as U.S.-India trade deal turbocharges stocks

• U.S. tariffs on Indian exports dropped from over 50% (including a 25% levy related to Russian oil purchases) to 18%, while India agreed to reduce its tariff and non-tariff barriers to zero
• India committed to halt Russian oil purchases and increase purchases from the United States as part of the agreement reached between President Trump and Prime Minister Modi
• The sharp tariff reduction on 'made in India' products marks a major shift in bilateral trade relations and immediately boosted investor sentiment in Indian markets

Summary

Market Movement:

India's benchmark Nifty 50 index surged 5% at Tuesday's open following the announcement of a significant U.S.-India trade agreement.

Key Deal Terms:

The United States agreed to slash tariffs on Indian goods to 18% from over 50% previously imposed. President Donald Trump initially mentioned a reduction from 25% to 18% in reciprocal tariffs, though Reuters reported the overall tariff had been cut from approximately 50%. The original 50% included a 25% levy specifically related to India's purchases of Russian oil.

In exchange, India committed to reducing its tariff and non-tariff barriers against U.S. goods to zero. Additionally, India agreed to cease purchasing Russian oil and instead significantly increase oil imports from the United States.

Political Context:

The deal was negotiated through direct communication between President Trump and Indian Prime Minister Narendra Modi. Modi confirmed on social media platform X that "made in India" products would benefit from the reduced 18% U.S. tariff rate while expressing support for Trump's global peace and prosperity initiatives.

Market Implications:

The substantial 5% opening gain in the Nifty 50 reflects strong investor optimism about improved trade relations between the world's largest and most populous democracies. The tariff reduction is expected to boost Indian exports to the U.S. market, potentially benefiting multiple sectors of India's economy. The agreement also signals a geopolitical shift in India's energy sourcing away from Russia toward American suppliers, with broader implications for global energy trade flows.