Indian markets saw multiple positive triggers today as the US sharply reduced tariffs on Indian exports from 50% to 18% following a call between Prime Minister Narendra Modi and President Donald Trump. The earlier tariff structure—25% reciprocal duty and a 25% penalty linked to India’s Russian oil imports—has now been fully withdrawn, offering major relief to exporters in sectors such as pharmaceuticals, textiles and engineering goods.
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Sun Pharmaceutical Industries Ltd
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Star Health & Allied Insurance Co. Ltd
Brokerage: Motilal Oswal
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Canara Bank
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View: Asset quality stability, operating leverage, PSU re-rating potential.
🇮🇳🇺🇸 Big Relief for Indian Exporters: US Tariffs Slashed to 18%
After a call between PM Narendra Modi and President Donald Trump, US tariffs on Indian goods were cut from 50% to 18%, effective immediately.
🔢 What changed in numbers
Earlier 50% tariff =
25% reciprocal tariff (US concern over India’s tariffs)
25% penalty for India’s Russian oil purchases
Both penalties removed → Net tariff now 18%
🤝 What India agreed to
$500+ billion US purchases (energy, tech, agri, coal, etc.)
Energy shift: Gradual move away from Russian oil; higher US energy imports
Tariff rationalisation: Phased reduction of Indian tariffs on US goods towards zero
📌 Why it matters
Relief for textiles, pharma, engineering exports hit since Aug 2025
Restores competitiveness in the US market
Described as “mutually beneficial cooperation” by PM Modi
🏦 Corporate & Regulatory Updates
One 97 Communications (Paytm)
RBI compounding order: ₹18.76 lakh for FEMA contraventions
Period: Mar 2016 – Jun 2017 | Underlying value: ₹33 crore
Impact: No material impact on financials/operations
Earlier compounding: ₹4.28 lakh (Nearby India Pvt Ltd matter)
Power Grid Corporation of India Ltd
Conducted Analysts & Institutional Investors Meet on Feb 2, 2026
Management discussed business outlook post Q3 FY26
Audio/video recordings released
🌍 Global Commodities Update (Agri)
Canola: $644.70 | Day: -0.51% | Week: -0.4% | YoY: +0.6%
Sunflower Oil: $1,547.00 | Day: +0.45% | Week: +1.2% | YoY: +21.1%
Cotton: $62.93 | Day: -0.38% | Week: -0.1% | YoY: -4.9%
Rice: $11.07 | Day: +0.35% | Week: +1.2% | YoY: -19.4%
Soybeans: $1,060.77 | Day: -0.33% | Week: -0.1% | YoY: +0.2%.
Separately, One 97 Communications (Paytm) disclosed an RBI compounding order of ₹18.76 lakh related to past FEMA contraventions, stating no material impact on operations, while Power Grid Corporation of India held its analyst and investor meet to outline its post–Q3 FY26 outlook.
PHDCCI President Rajeev Juneja's reaction on India – US Trade deal
"By lowering tariff duties, the United States signals a renewed commitment to trade openness and economic efficiency. Reduced tariffs cut input costs for domestic industries, strengthen supply chains, and ease inflation by lowering prices for businesses and consumers. They benefit key sectors—including manufacturing, technology, healthcare, and renewable energy—by improving access to intermediate goods, capital equipment, and critical components. Importantly, this approach aligns with the spirit of cooperation fostered by the strong personal rapport between Narendra Modi and Donald Trump, reinforcing trust and predictability in bilateral trade. — Mr. Rajeev Juneja, President, PHDCCI.
"TVS Motor Company welcomes the India - US trade deal announced following the conversation between PM Modi and President Trump. The reduction in the US reciprocal tariff on Indian goods to 18% is a positive step that improves export competitiveness and reinforces confidence in long-term bilateral economic ties, furthering the Hon'ble PM's vision of Viksit Bharat 2047. Equally important is the intent on both sides to progressively lower tariffs and non-tariff barriers, which can deepen supply-chain integration, enable faster technology collaboration, and attract investment into advanced manufacturing.
India has now secured several strategic trade deals with key economic partners around the world. In a challenging global environment, predictability and openness in trade help Indian industry scale, innovate and create jobs. We look forward to a stronger India–US partnership that accelerates growth, expands market access, and supports India's ambition to be a globally competitive manufacturing and innovation hub."
- Mr. Sudarshan Venu, Chairman and Managing Director, TVS Motor Company.
Prasenjit Paul, Equity Research Analyst at Paul Asset & Fund Manager at 129 Wealth Fund on the India - US trade deal, for the stock market -
''The landmark India-US trade agreement removes the overhang that has clouded the outlook for Indian equities, triggering a sentiment reversal for global investors who had paused allocations due to tariff fears. By capping tariffs at 18% and establishing a framework for reciprocal market access, this deal transforms a major geopolitical risk into a structural tailwind, particularly for export-heavy sectors like IT Services, Textiles, and Auto Ancillaries that were bracing for steeper duties. The removal of these trade frictions is expected to revive foreign portfolio inflows (FPI), which have been the missing piece in recent market consolidation, thereby supporting valuation premiums. Beyond immediate tariff relief, the strategic alignment on energy and defense procurement creates a robust long-term growth corridor for India Inc., validating the 'China Plus One' narrative. For equity participants, this is a clear signal to look past near-term volatility and position for a multi-year export-led earnings cycle now that the biggest external variable has been resolved.''
Harsh Gupta Madhusudan, Fund Manager – PIPE Fund, Ionic Asset-
"India's just announced trade deal with the US is a welcome news. For many MSME as well as listed goods exporters, a major overhang is removed particularly in textiles, auto/auto ancillaries, gems/jewellery and so on. Similarly positive news for the markets in terms of sentiment and flows. The Indo-EU FTA gave India negotiating leverage with Trump, though we must wait for the fine print. Combined with reasonable valuations, good earnings (ex-one time labour charge), a falling dollar and a solid domestic macro of high growth and low inflation, Indian equity markets look attractive from a risk-reward perspective."
Quote – Ms. Anitha Rangan, Chief Economist RBL Bank
US agreed to roll back the punitive 25% tariff while reducing the reciprocal tariffs to 18% from 25% in return for agreement that India will stop buying Russian oil. Easing months of tensions between two countries, this deal not only clears the air between two countries but also clears one zone of geo-political tensions putting India back in the US bloc.
While the finer details are awaited on contours of the deal and what India has given and taken, taking a cue from the EU deal and media reports so far, it is unlikely that India made any concession in its sensitive sectors viz. agriculture and dairy. For the sectors which had been impacted by US tariffs this a big win. Textiles, gems and jewellery, leather goods, handicrafts, toys, auto components which are not only export sensitive but also are large employers and labour intensive. For each of these sectors this along with the EU deal is a double positive as it opens up avenues to expand exports afresh with a zeal.
Alongside a notable positive now is we have an 18% tariff vs several countries having 20-25% . Competitors like Vietnam, Bangladesh, Pakistan, China) have higher tariffs versus India. This is particularly positive for the textile sector among others. As expected bond, equity and currency markets have given a thumbs up for the deal. With the budget batting for continuity, the EU deal giving a new avenue for exports and US trade deal uncertainty out the way, for India the outlook only look promising even if the world continues to remain clouded with geopolitical uncertainties.
The conclusion of the India–US trade agreement and the associated tariff realignment is a constructive policy development for Indian exporters, including the value-added dairy segment. Greater clarity on tariffs helps create a more predictable trade environment for products such as cheese, ghee and specialised dairy ingredients. At Milky Mist, we view such policy measures as supportive of structured and transparent bilateral trade. Over time, developments like these can contribute to strengthening the broader dairy ecosystem, spanning farmers, processors and allied stakeholders, while enabling more consistent engagement with international markets,"
- D r. K. Rathnam, Whole-time Director and Chief Executive Officer, Milky Mist Dairy Food Limited.
Mr. Sameer Merchant, MD & CEO, Laxmi Denta Limited-
"The reduction in tariffs by the US is a meaningful step toward easing trade barriers for the global medical device sector and reinforces confidence in the cross-border healthcare ecosystem. Improved market access can support export momentum and create headroom for manufacturers to reinvest in advanced technologies, quality systems, and capacity expansion. For specialised medical device segments, such developments are particularly significant, as they enable greater participation in global value chains while maintaining high standards of precision, safety, and compliance. By lowering entry thresholds and improving trade economics, this move supports long-term manufacturing sustainability and encourages innovation-led growth, ultimately contributing to wider access to high-quality medical devices across international markets."
