India's Market Soars on Landmark U.S. Trade Deal

India's markets surged as a trade deal with the U.S. slashed tariffs on Indian goods, boosting stocks and the rupee. The Nifty 50 gained 2.5%, with foreign investors purchasing record stocks. The deal entails halting Russian oil buys and opening India's agriculture sector, enhancing investor confidence.

India's financial markets witnessed a dramatic surge on Tuesday following a pivotal trade agreement that reduced U.S. tariffs on Indian goods from 50% to 18%. This move invigorated the country's stocks, bonds, and currency. India's Nifty 50 stock index climbed 2.5%, while the rupee appreciated over 1% against the dollar, reaching 90.2650 per dollar. Concurrently, the yield on India's 10-year benchmark bond decreased by 5 basis points to 6.72%.

Tuesday's rally marked the Nifty's highest single-day increase since May 2025, with the rupee experiencing its strongest rise in over seven years. Foreign institutional investors were net buyers, fueled by the optimism surrounding the U.S. trade agreement, and recorded their highest inflows since October 28 at 52.36 billion rupees, according to preliminary data from India's National Stock Exchange.

U.S. President Donald Trump announced the deal via social media following discussions with Indian Prime Minister Narendra Modi. The deal entails India ceasing Russian oil purchases and reducing barriers for U.S. exports. Despite limited details in Trump's announcement, an Indian official revealed that India agreed to purchase petroleum, defense equipment, and aircraft from the U.S., while partially opening its restricted agricultural sector. This trade breakthrough promises to bolster investor sentiment and improve foreign investments in Indian assets, according to experts.

(With inputs from agencies.)