Mumbai: Global and Indian brokerages on Tuesday largely welcomed the India–US trade deal, calling it a major positive for India’s economy, corporate earnings and foreign investment sentiment.
The strong endorsement from financial experts was reflected in the stock markets, with the Sensex soaring over 4,200 points during intraday trade to touch a record high of 85,871.73.
Brokerages believe the reduction in reciprocal tariffs on Indian exports to the US will ease pressure on India’s external balances and improve growth prospects.
Goldman Sachs said the lower tariffs could help narrow India’s current account deficit by around 0.25 per cent of GDP in 2026, bringing it down to nearly 0.8 per cent.
The firm also expects capital inflows to recover once the deal is fully implemented, which could support the rupee and reduce downside risks to its dollar-rupee forecast.
Goldman Sachs added that the Reserve Bank of India is likely at the end of its rate-cut cycle and may keep the repo rate unchanged at 5.25 per cent through 2026.
It also noted that the trade agreement puts India in a slightly stronger position compared to other Asian emerging markets in terms of export competitiveness.
Bernstein said the improving sentiment around India makes it a good time for investors to buy into the market, even though corporate earnings have been soft in recent months.
Nomura highlighted the likely return of foreign investment into India. It expects both foreign portfolio investor (FPI) flows and foreign direct investment (FDI) commitments to gradually reverse after a weak FY26.
The brokerage is projecting a balance of payments surplus of around $7 billion in FY27. It also pointed out that the reduction in tariffs to 18 per cent will ease margin pressure on labour-intensive export sectors such as textiles and manufacturing.
BofA Securities said India opening its markets to more US products could lead to higher technology imports and encourage long-term US investments into the country.
It added that even with some weakness in the rupee, the impact of the new tariff structure will be limited.
According to its estimates, once existing US tariffs on items like steel, aluminium and automobiles are considered, India’s effective tariff rate could fall to around 12–13 per cent, compared to nearly 30–35 per cent earlier.
Domestic brokerage Motilal Oswal said markets will now focus more on the improving trend in corporate earnings.
Antique Stock Broking termed the agreement as highly positive for Indian equities.
It said 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, Antique has set a Nifty 50 target of 29,500 by March 2027, with a preference for sectors such as financials, capital goods, defence and consumer-focused stocks.
