A sharp rise in GIFT Nifty is pointing to a strong opening for Indian stock markets on Tuesday after India and the United States announced a long-awaited trade deal, easing tariff worries that had weighed on markets for months. For the unversed, the US has reduced tariffs on Indian goods from 25% to 18%.
GIFT Nifty is an early indicator of how Indian markets may open. It trades before Indian market hours and reflects global investor sentiment. A strong move in GIFT Nifty usually signals a positive start for Dalal Street.
GIFT Nifty jumped nearly 800 points at one stage before easing slightly, indicating a broad relief rally. The surge came after President Donald Trump said the US would cut reciprocal tariffs on India to 18%, while India would reduce tariffs and non-tariff barriers on American goods.
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For markets, the announcement removes a major uncertainty that had kept foreign investors cautious. Indian equities struggled through January, with the Nifty falling over 1,000 points at its worst, while foreign portfolio investors sold billions of dollars’ worth of shares.
Analysts have long said that a breakthrough on the India-US trade front could trigger a turnaround in sentiment — and the deal appears to be doing just that.
What experts are saying
Sonam Srivastava, founder and fund manager at Wright Research PMS, told the Economic Times that the tariff cut is clearly positive for Indian markets.
“The sharp jump in GIFT Nifty reflects an immediate repricing of risk, driven by expectations of better trade competitiveness, lower costs for exporters and stronger alignment between the two economies,” Srivastava told the outlet.
She added that export-oriented sectors may see better order flows and stable margins, though the sustainability of the rally will depend on earnings.
Garima Kapoor, deputy head of research and economist at Elara Capital, said the 18% tariff puts India closer to peer economies.
She noted that if penalties linked to Russian oil purchases are also removed, India could gain a favourable edge. Overall, she said the direction of the deal is supportive for Indian assets.
Which stocks may benefit
Markets are expected to open with a gap-up, led by export-oriented and globally linked stocks.
Textiles and apparel: Stocks like Kitex Garments, Pearl Global, KPR Mill, Bombay Dyeing and Indo Count, which were hit earlier by tariff fears, may see renewed interest.
US-focused exporters: Welspun Living, Gokaldas Exports and Trident could benefit from improved access to the US market.
Gems and jewellery: Goldiam International is in focus. Colin Shah, managing director of Kama Jewelry, said the easing of tariffs brings relief and restores confidence for exporters and US buyers.
Seafood exporters: Stocks such as Avanti Feeds, Apex Frozen Foods and Coastal Corporation could see stabilisation in volumes and margins.
Auto ancillaries and engineering: Bharat Forge, Ramkrishna Forgings, Balkrishna Industries and JK Tyre are among stocks to watch due to their US exposure.
IT stocks: TCS, Infosys, HCL Technologies and Wipro may react positively as improved trade sentiment boosts overall confidence, even though services are not directly taxed.
What to watch next
Market experts caution that while the initial reaction may be strong, follow-through will depend on global cues, technical levels and foreign investor flows. A sustained move above key resistance levels and stabilising volatility would support a stronger rally.
Overall, the India-US trade deal has removed a major overhang for markets and improved the medium-term outlook by easing trade friction and strengthening earnings visibility.
