New Delhi: Indian financial markets rose sharply on Monday after India and the United States announced a new trade agreement that eases tariff pressure and improves access for Indian exports.
Shares on the Sensex and Nifty jumped as investors welcomed the deal, which is expected to reduce costs for Indian goods sold in the US and improve business confidence. Export focused sectors such as auto parts, textiles and engineering companies led the gains. Government bonds also moved higher as traders bet on stronger foreign investment inflows.
The Indian rupee strengthened against the US dollar, posting one of its best single day gains in years. The currency’s rise reflected optimism that the agreement will support exports and bring in more overseas funds.
The deal was announced after talks between US President Donald Trump and Indian Prime Minister Narendra Modi. Under the agreement, the United States will cut tariffs on a range of Indian products that had faced high duties in recent years. This makes Indian goods more competitive in the US market.
India has also agreed to increase purchases of some US goods, including energy products. Officials said the agreement is aimed at stabilising trade ties and reducing uncertainty for businesses on both sides.
Market experts said the rally came from relief after months of trade tension. They added that lower tariffs and clearer trade rules could improve company earnings and support economic growth.
However, analysts cautioned that full details of the agreement and its timeline are still awaited. They said markets may remain sensitive to how quickly the measures are implemented and whether both sides follow through on their commitments.
For now, investors see the deal as a positive step that could boost trade, attract capital and support the rupee in the near term.