Indian Markets Take The Bull Ride As US–India Sign Trade Deal, Slash Tariffs

Indian equity markets delivered a blockbuster rally on Tuesday after the United States and India announced a long-awaited trade agreement that will sharply reduce reciprocal tariffs on Indian goods, reviving investor confidence and igniting buying across export-heavy sectors.

Benchmark indices surged after U.S. President Donald Trump confirmed that Washington would cut tariffs on Indian imports to 18 percent from the earlier 50 percent. The move follows months of negotiations and is being seen as a meaningful step toward restoring competitiveness for Indian exporters in the U.S. market.

The Nifty50 jumped 3 percent in early trade, climbing to 25,834.6 points by 12:17 p.m. on February 3, 2026. As optimism built through the session, the rally intensified. The BSE Sensex soared 4,205.27 points, or 5.14 percent, to 85,871.73, while the Nifty vaulted 1,252.8 points, or 4.99 percent, to 26,341.20.

Textiles, Leather, Fisheries Stage a Comeback

Textile and leather stocks, among the worst hit when tariffs were initially raised, led the sectoral rally, with several counters surging up to 20 percent. These companies have significant exposure to the U.S. market, which contributes nearly 50–70 percent of revenues for many players.

K P R Mill and Garware Technical Fibres hit the upper circuit. Welspun Living jumped 19.85 percent, Vardhman Textiles rose 19.60 percent and Trident climbed 19.52 percent. Raymond Lifestyle advanced 9.56 percent, while Page Industries added 5.31 percent on the BSE.

Leather and footwear stocks also saw strong buying interest. Bhartiya International jumped 10.70 percent, Mayur Uniquoters surged 7.39 percent, Bata India climbed 5 percent and Metro Brands gained 3.96 percent.

Fisheries and allied industries responded positively to the tariff cut announcement. Avanti Feeds surged 20 percent, Apex Frozen Foods rallied 17 percent and Mukka Protein gained 4.6 percent on Tuesday morning.

Expert View: Positive Signal, Not A Silver Bullet

Market experts welcomed the deal but urged caution on expectations.

Nitin Rao, CEO of InCred Wealth, said the agreement appears to be struck on “mutually beneficial terms,” noting that the U.S. sought greater access to Indian oil markets while India aimed to secure a stable and influential export partner. “This alignment sends a strong message that could improve fund flows and create a favourable business environment,” Rao said, adding that while valuations still have room to adjust, the deal could create a floor for markets.

Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, highlighted that while the reduction of the 25% additional penal tariffs, including those linked to buying Russian oil—and the cut in reciprocal tariffs to 18% are positive, exports to the U.S. form only a small part of India’s $4 trillion economy. “The deal is a short-term boost to sentiment and markets, but one should not expect miracles,” he said, adding that the immediate rally may be driven by short covering, with sustained gains dependent on fresh long-term investments.

For now, the announcement has injected fresh optimism into Dalal Street, marking one of the strongest single-day rallies in recent months and reaffirming the market’s sensitivity to global trade cues.