NEW DELHI: US -listed shares of major Indian companies surged after US President Donald Trump announced a trade deal cutting US tariffs on Indian goods to 18% from 50%, in return for India agreeing to halt purchases of Russian oil and lower trade barriers.
On Wall Street, IT services major Infosys closed 4.3% higher, Wipro jumped 6.8%, HDFC Bank gained 4.4%, and the iShares MSCI India exchange-traded fund rose 3%, reflecting investor optimism around improved trade access and reduced tariff pressure.
Trump announced the agreement on Monday following a call with Prime Minister Narendra Modi, saying India would now buy oil from the United States and potentially Venezuela. A White House official told Reuters that the US would rescind a punitive 25% duty imposed on all imports from India over its purchases of Russian oil, which had been stacked on top of a 25% “reciprocal” tariff.
PM Modi welcomed the move, saying, “Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement.”
Trump said India had committed to “BUY AMERICAN at a much higher level,” including more than $500 billion worth of US energy, technology, agricultural and other products. “They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO,” Trump said.
Despite the market reaction, details of the deal remain limited. Trump’s social media post did not specify when the lower tariff rates would take effect, the timeline for India to end Russian oil purchases, or the scope of trade barrier reductions. As of late Monday, the White House had not issued a presidential proclamation or Federal Register notice required to formalise the changes.
India’s commerce and foreign ministries did not immediately respond to requests for comment, while Russia’s embassy in Washington also did not respond. Previous US trade deals with Japan and South Korea included large investment commitments, but no such pledges were mentioned in the India announcement.
Economists said the agreement brings India broadly in line with Asian peers on tariff rates. Madhavi Arora of Emkay Global said it would remove a disproportionate drag on India’s exports and its rupee, after Indian markets were hit hard by the tariff hikes and saw record foreign investor outflows in 2025.
US business groups reacted cautiously. The US Chamber of Commerce called the announcement progress toward a broader market-opening deal. “We are optimistic that this is the first step toward a comprehensive trade agreement that will unlock even more private sector collaboration,” its CEO Suzanne Clark said.
The deal also comes amid efforts by the Trump administration to finalise trade frameworks before a US Supreme Court ruling on the legality of Trump’s “reciprocal” tariffs. India, the world’s third-largest oil importer, has recently begun reducing Russian oil purchases, with imports projected to fall sharply in the coming months, according to Reuters.
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