India-US trade deal spurs optimism for textile, chemical, and leather stocks
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Indian stock markets are expected to see sector-specific gains after the White House released the fine print of the India-US trade deal, removing uncertainty that had lingered since the initial announcement by US President Donald Trump and Prime Minister Narendra Modi earlier this week.
The confirmation clarified that the United States will lower reciprocal tariffs to 18 percent for key Indian sectors in return for export commitments worth $500 million from India.
Following the initial announcement, benchmark indices Nifty 50 and Sensex rose sharply, with several textile stocks rallying as much as 20 percent. Market participants now expect broader relief after a prolonged period of trade-related uncertainty.
The tariff reduction is expected to benefit export-heavy sectors such as textiles and apparel, where companies including Indo Count, Kitex Garments, Pearl Global, and Gokaldas Exports have significant exposure to the US market. Leather and footwear makers such as Mirza International and Mayur Uniquoters are also seen as potential beneficiaries.
Other sectors likely to gain include plastics, rubber products, and organic chemicals, with companies such as Aarti Industries, SRF, and Jubilant Ingrevia cited as key beneficiaries. Home decor and artisanal product makers like Stanley Fashion and Shaily Engineering may also see an upside.
Certain sectors, including generic pharmaceuticals, gems and jewellery, diamonds, and aircraft parts, have been exempted from reciprocal tariffs. This is seen as sentimentally positive for related stocks, including Vaibhav Global, Rajesh Exports, Dynamatic Technologies, HAL, and MTAR Technologies.
Auto components will continue to face base-level tariffs under Section 232 exemptions, which could limit gains for companies such as Sona BLW and Motherson Sumi.
India will reduce tariffs on several US products, including agricultural goods, wine, and spirits, which may pressure domestic liquor companies. India has also committed to purchasing $500 billion worth of US goods over five years, including energy, aircraft, technology products, and coking coal.