MUMBAI, India — Global and domestic brokerages on Tuesday broadly welcomed the newly announced India–U.S. trade agreement, calling it a significant positive for the Indian economy, corporate profitability and foreign investor sentiment.
The optimistic assessments were reflected in equity markets, with the benchmark Sensex surging more than 4,200 points in intraday trade to touch a record high of 85,871.73, as investors reacted to expectations of improved trade terms and capital inflows.
Analysts said lower reciprocal tariffs on Indian exports to the United States are expected to ease pressure on India’s external balances and support medium-term growth prospects.
Goldman Sachs estimated that reduced tariffs could narrow India’s current account deficit by about 0.25 percentage points of GDP in 2026, bringing it closer to 0.8 percent. The brokerage also expects capital inflows to recover as the agreement is implemented, which could support the rupee and reduce downside risks to its dollar-rupee outlook.
Goldman Sachs added that the Reserve Bank of India appears to be nearing the end of its rate-cut cycle and may keep the repo rate unchanged at 5.25 percent through 2026. It also noted that the trade agreement places India in a slightly stronger position than other Asian emerging markets in terms of export competitiveness.
Bernstein said improving sentiment around India makes the current environment attractive for investors, even though corporate earnings growth has remained soft in recent months.
Nomura highlighted the likelihood of a gradual return of foreign investment into India. It expects both foreign portfolio investor flows and foreign direct investment commitments to reverse following a weak FY26. The brokerage is projecting a balance of payments surplus of around $7 billion in FY27.
Nomura also said that tariff reductions to around 18 percent would ease margin pressure on labor-intensive export sectors such as textiles and manufacturing.
BofA Securities said India’s decision to open its markets to more U.S. products could lead to higher technology imports and encourage long-term U.S. investment into the country. It added that even with some weakness in the rupee, the impact of the revised tariff structure is expected to be limited.
According to its estimates, once existing U.S. tariffs on items such as steel, aluminum and automobiles are factored in, India’s effective tariff rate could fall to around 12–13 percent, compared with nearly 30–35 percent earlier.
On the domestic front, Motilal Oswal said investor focus is now likely to shift toward signs of improvement in corporate earnings.
Antique Stock Broking described the agreement as highly positive for Indian equities, saying the key benefit would be the likely return of foreign investors, which has been a major concern for markets over the past year. Based on this outlook, the brokerage has set a Nifty 50 target of 29,500 by March 2027, with a preference for financials, capital goods, defense and consumer-oriented stocks.
If you want, I can also normalize things like percent vs. per cent, U.S. vs United States usage, or tune the tone slightly more financial-wire or more general business news. (Source: IANS)
