Tue Feb 03 08:55:01 UTC 2026: # India’s Stock Market Soars Following Landmark U.S. Trade Deal

The Story:

India’s benchmark stock indices, the Nifty 50 and BSE Sensex 30, experienced a significant surge on February 3, 2026, following the announcement of a U.S.-India trade deal that reduces reciprocal tariffs on Indian imports to 18%. The agreement, revealed by U.S. President Donald Trump, also includes India’s commitment to increase purchases of U.S. goods and energy, and cease the purchase of Russian Oil, potentially from Venezuela. The market responded positively, with the Nifty 50 closing up nearly 5% and the Sensex rising over 5%.

Key Points:

  • The Nifty 50 soared to 26,341.20 points, a 4.99% increase.
  • The BSE Sensex zoomed to 85,871.73 points, a 5.14% increase.
  • Donald Trump announced a reduction in reciprocal tariffs on Indian imports from 25% to 18%.
  • India committed to increasing purchases of U.S. goods including energy, technology, and agricultural products, and cease purchasing Russian Oil, potentially replacing it with Venezuelan oil.
  • Textile and leather stocks experienced substantial gains, with some surging as much as 20%.
  • Foreign Institutional Investors offloaded equities worth ₹1,832.46 crore, while Domestic Institutional Investors bought stocks worth ₹2,446.33 crore on February 2, 2026.

Critical Analysis:

The surge in the Indian stock market is a direct reaction to the positive sentiment generated by the U.S.-India trade deal. Trump’s announcement, highlighting his “friendship and respect” for Prime Minister Modi, is clearly designed to foster closer ties and economic cooperation between the two nations. The inclusion of India ceasing Russian oil purchases and potentially buying from Venezuela is likely a strategic move to isolate Russia further and potentially stabilize the Venezuelan oil sector which could give the U.S. more control over the global oil market. The previous high tariffs had demonstrably hurt Indian exports to the U.S., as evidenced by the 1.83% decline in December 2025, and the reduction is expected to revitalize key sectors like textiles and leather. The Indian, American industry bodies and leaders lauded India-U.S. tariff deal as a strong catalyst.

Key Takeaways:

  • The U.S.-India trade deal has provided a significant boost to Indian market confidence.
  • Reduced tariffs are expected to positively impact export-oriented sectors, particularly textiles and leather.
  • The deal aligns with the U.S.’s broader strategic goals of countering Russian influence and potentially influencing Venezuelan oil production.
  • The market’s anticipation and discounting of these developments is fueling the boom.
  • While foreign investors offloaded equities, domestic investors capitalized on the opportunity, indicating strong local confidence.

Impact Analysis:

The long-term implications of this trade deal could be substantial. Increased trade between the U.S. and India may reshape global trade dynamics, create more opportunities for bilateral investments, and strengthen the political alliance between the two countries. The commitments made by India regarding energy purchases will have geopolitical ramifications. Revitalizing industries like textiles and leather in India can potentially create jobs and foster economic growth. This deal, combined with the India-EU deal, could potentially make India a new manufacturing powerhouse.

Read More

Related News: