Indian stock markets opened higher on Tuesday, hours after the much awaited India-US trade agreement.

BSE-listed companies added ₹20 lakh crore in market capitalization, Nifty 500 stocks gained up to 20%, and all sectoral indices were in the green.

At 10:45 AM, Nifty Realty was trading 5.21% higher, followed by Nifty Consumer Durables (up 3.45%), Nifty Financial Services(up 3.33%), and Nifty Healthcare Index (up 3.28%).

Apar Industries Ltd. (up 18.81%), Welspun Living Ltd. (up 18.54%), KPR Mill Ltd. (up 17.58%), PCBL Chemical Ltd. (up 14.24%), LT Foods Ltd. (up 12.92%) were among the top gainers among Nifty 500 stocks.

Washington agreed to slash reciprocal tariffs on Indian goods to 18% from 25%, effective immediately, in exchange of India halting Russian oil purchases and lowering trade barriers.

A US Embassy spokesperson also confirmed that a 25% penalty tariff imposed on India in August 2025, which had pushed its total tariffs to 50%, has now been dropped.

With the new deal in place, India is now amongst the nations facing one of the lowest tariff rates from the US, compared to other major economies including China, Pakistan, Indonesia, Bangladesh and Vietnam.

The Rupee opened stronger against the US Dollar at 90.40.

President Donald Trump in his post on Truth Social said, “The Prime Minister also committed to “BUY AMERICAN,” at a much higher level, in addition to over $500 BILLION DOLLARS of U.S. Energy, Technology, Agricultural, Coal, and many other products.”

In his response, Prime Minister Modi did not refer to any of the conditions mentioned by the US President, nor did he give the details of the trade deal.

As per media reports, experts expect FIIs to come back to Indian markets in the short term, as India might be perceived as a premier strategic play among emerging markets. They believe that there might be a positive impact on export-oriented sectors like textiles, pharmaceuticals, IT, seafood, auto ancillaries, engineering, speciality chemicals and so on.

Questions that remain

What are the details of the deal?

Both countries were expected to drop tariffs, but no details of the negotiated text of the Free Trade Agreement (FTA), tariffs and non-tariff barriers, market access and investments, have so far been disclosed by both governments.

Is 18% really one of the lowest tariffs in the region?

India’s neighbours face higher tariffs — Bangladesh and Vietnam (20%), Pakistan (19%) and China (34%, but much of it was delayed until November 2026); however, they also receive a special GSP (Generalised System of Preferences) concession of about 5%, which the U.S. withdrew from India in June 2019.

Will India stop buying Russian Oil?

While the US President said that India has agreed to stop buying Russian oil, the Ministry of External Affairs (MEA) is yet to clarify.

Is India making a compromise?

Earlier this year, the US President indicated that the US would “allow” countries to import Venezuelan oil. In 2019, India had similarly “zeroed out” its imports of Iranian and Venezuelan oil after the US had threatened sanctions. Reduction in tariffs may be a relief for India, but it raises questions over its autonomy on important decisions like energy procurement.

What is the size of the deal?

The MEA is yet to comment on the size of the deal and the sectors involved, though the social media post by the US President mentions US $500 billion. Currently, India-U.S. bilateral trade in goods stands at about U.S. $131 billion, and India’s investment in the U.S. has hovered around U.S. $40 billion.