Trump’s 18% Tariff Announcement – Impact on the Indian Stock Market
R. Suresh Kumar, Director, www.fundzavenue.com
Which Sectors Will Benefit? – Which Stocks to Buy?
Former US President Donald Trump has made an important announcement regarding a trade agreement that proposes reducing tariffs on goods exported from India to the United States to 18%. Earlier, many Indian products faced much higher import duties in the US market. This new proposal is therefore being viewed as highly favorable for India.
Immediately after this announcement, the Indian stock market reacted positively with strong upward momentum. Export-oriented sectors such as textiles, chemicals, and auto components attracted significant investor attention.
Immediate Market Reaction
Following the India–US trade agreement announcement:
· The Nifty and Sensex indices witnessed strong gains.
· As of February 3, 2026, around 12:00 PM, Nifty surged by 2.92% (around 735 points). At the closing 2,54% surged.
· GIFT Nifty also indicated a sharp rise during early trading hours.
· The Indian Rupee strengthened against the US Dollar.
· Foreign investor confidence improved considerably.
Earlier concerns about higher US tariffs had put pressure on Indian markets. This announcement has therefore brought major relief and renewed optimism.
Sectors Likely to Benefit the Most
1. Textiles and Apparel Sector
Indian textile exporters, who depend heavily on the US market, are expected to be the biggest beneficiaries of this tariff reduction.
Key Beneficiary Companies:
· KPR Mill
· Gokaldas Exports
· Welspun Living
2. Auto Components Sector
Indian auto component manufacturers have a significant presence in the US market. Lower tariffs will likely improve their sales and profit margins.
Key Beneficiary Companies:
· Bharat Forge
· Sona BLW Precision Forgings
· Samvardhana Motherson
· Ramkrishna Forgings
Since these companies generate a large portion of their revenue from exports, they are viewed as strong long-term investment opportunities.
3. Chemical Export Companies
Indian specialty chemical companies export a large volume of products to the US. Reduced tariffs will improve their global competitiveness and profitability, making this sector another major beneficiary.
4. IT Sector – Indirect Benefits
Although IT companies are not directly affected by tariffs, improved India–US trade relations can bring indirect advantages such as:
· New business opportunities
· Additional orders from US clients
· Improved market sentiment
Most market experts advise that rather than making random investments, investors should focus on carefully selected stocks from export-oriented sectors.
Risks to Keep in Mind
While the announcement is positive, investors should also remain cautious about:
· Final terms and conditions of the trade agreement
· Future US economic conditions
· Global recession risks
· Fundamental performance of companies
These factors could still influence market movements going forward.
Conclusion for Investors
✔ Market sentiment is highly positive in the short term
✔ Export-oriented sectors are the biggest beneficiaries
✔ Focus on fundamentally strong companies
✔ Long-term investors can adopt a gradual buying strategy
Strengthening trade relations between India and the United States is expected to be a major positive driver for Indian markets in the long run. Market analysts believe this development could pave the way for sustained growth and investment opportunities.
R.Suresh Kumar, Director, www.fundzavenue.com
Call : +91 9884022122
Mail :fundzavenue@gmail.com
Read articles written by Mr. R.Suresh Kumar in Nanayam Vikatan, a leading personal finance magazine https://bit.ly/4afnSZD
R.Suresh Kumar, runs FundzAvenue, a firm that offers comprehensive personal finance services such as fixed deposits, stock market investments, mutual funds, tax planning, financial goal planning, and insurance to individuals and corporate employees. The company currently serves over 2,000 individual clients.
