Gift Nifty at 25,935 signals a gain of nearly 1000 points for Nifty at open, following the announcement of the historic India-US deal. Nifty futures on Monday closed at 25,142.
Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Group, said while the imposition of a 50 per cent US The tariff disrupted a wide swathe of Indian exports, its direct impact on the earnings of India’s listed corporates was limited. India’s tariff-impacted goods export exposure to the US is skewed toward privately held MSMEs and low-margin manufacturing rather than large, listed firms. Consequently, the subsequent rollback in tariff rates is, by itself, unlikely to materially alter the earnings trajectory of Indian equities.
“Yet, the macroeconomic and strategic consequences of the episode have been far more significant. The tariff shock acted as a catalyst for reforms that may ultimately prove far more valuable than the relief from tariffs themselves. It accelerated rationalization of GST rates to protect domestic demand, pushed long-pending labor and compliance reforms to the forefront, and encouraged a deliberate diversification of India’s foreign-exchange reserves away from excessive dollar concentration. Most importantly, it forced India to seek deeper market access and geopolitical hedging through a landmark trade agreement with the European Union — opening a far larger, richer and more stable export market for Indian manufacturing and services,” he added.
Meanwhile, global stocks are also showing a strong rebound. Nikkei jumped over 3 per cent, Kospi nearly 5 per cent.
With the India–US treaty in place, that overhang is beginning to lift. The key shift is not incremental tariff relief, but the restoration of geopolitical and trade stability. As risk premia normalize, India once again looks investable to global capital — a high-growth, politically aligned, strategically important economy with deep domestic demand and improving external linkages to both the US and Europe, he further said.
Garima Kapoor, Deputy Head of Research and Economist at Elara Capital said: as per POTUS’s Truth Social post, the US and India have reached a trade deal, with the US lowering Reciprocal Tariff on India to 18%. “Our estimates indicate the policy implies the effective tariff rate on India post-deal is at 14.1%, if Russia-related tariffs are removed.” The 18% tariff brings the rate in line with India’s peers that have ~20% rates. Removal of Russian oil related penalty is likely to generate a positive tariff differential for India.”
“Indian equities, in that sense, have been priced in a geopolitical discount, that is now fading. The case for a catch-up rally lies less in near-term earnings upgrades and more in the reversal of capital-market pessimism that the tariff shock and diplomatic friction had previously created,” she said.
Analysts said post-Budget, this would trigger unwinding of short positions and boost India stocks.
Ponmudi R, CEO of Enrich Money, said: “This positive external trigger is helping markets look past the recent post-Budget volatility triggered by the Union Budget 2026–27, where the unexpected hike in STT on derivatives led to a sharp knee-jerk sell-off, increased trading costs, and pressure on F&O heavy and brokerage stocks. “As markets gradually absorb the Budget impact, yesterday’s rebound highlighted selective value buying in infrastructure, defense, and large-cap stocks. Overall, the trade deal offers a strong near-term sentiment boost, particularly for the export-oriented and manufacturing sectors, while continued government focus on capex provides steady underlying support for the broader market,” he said.
Published on February 3, 2026
