India-US Trade Deal Effect: There was a rise in the stock market on Tuesday due to the announcement of the trade deal between India and America. Some stocks rose up to 20 percent…(Image Source: PTI)
highlights
- After the India-US trade deal, there was a tremendous rise in the stock market.
- Shares of shrimp and textile sectors jumped up to 20 percent.
- Exporters got relief due to reduction in American tariff to 18 percent.
India-US Trade Deal Effect: There was tremendous enthusiasm in the stock market as soon as the long pending trade deal between India and America was finalized. Shares of textile, seafood and other export-focused sectors recorded record gains in Tuesday’s trade. Many stocks rose by up to 20 percent, which seemed to change investor sentiment in one fell swoop.
Under this agreement reached after talks between US President Donald Trump and Prime Minister Narendra Modi, American tariff on Indian goods has now been reduced to 18 percent. Earlier this tariff had reached 50 percent, which had put huge pressure on Indian exporters. In return, India has talked about taking steps towards reducing tariff and non-tariff barriers on goods coming from America.
Fastest purchase among shrimp export companies
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Shrimp exporting companies benefited the most from this news. Shares of Avanti Feeds saw a rise of 20 percent on Tuesday and reached an intraday high of Rs 960. At the same time, shares of Apex Frozen Foods jumped by about 19.9 percent to Rs 352.30. Shares of Coastal Corporation also witnessed a rise of about 4.99 percent.
The shrimp sector is most dependent on the American market. About 48 percent of India’s total shrimp exports go to America. During the 50 percent tariff era, Indian companies had become among the most expensive suppliers of America, due to which there was increased pressure on both orders and margins.
Textile stocks came back to life
Tremendous growth was also seen in the textile sector on Tuesday. Shares like KPR Mill, Gokaldas Exports, Trident and Welspun Living rose up to 20 per cent. With the US tariff reducing to 18 per cent, Indian textile companies are now in a better position than competing countries like Vietnam and Bangladesh, where the tariff is around 20 per cent.
Big overhang removed from the market
This trade deal has removed a big overhang from the Indian market. For the past few months, the Indian stock market was under pressure due to trade uncertainty, weak rupee and global risk-off environment. In January, the Nifty had slipped more than 1,000 points from its low and foreign investors had sold shares worth billions of dollars.
Which sectors will be in focus next?
The impact of the trade deal is not going to be limited to just shrimp and textiles. In the coming days, investors will also keep an eye on sectors like Gems and Jewellery, Pharma, IT Services and Auto Components, where the US market share is considered important.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice in any way. ET NOW Swadesh recommends its readers and viewers to consult their financial advisors before taking any money-related decisions.
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