India’s benchmark Nifty 50 stock index opened 5% higher on Tuesday after New Delhi and Washington announced a long-awaited trade deal and the United States slashed tariffs on Indian exports.

US President Donald Trump said in the United States on Monday that the United States will reduce reciprocal tariffs on India from 25% to 18%. He added that India would reduce tariff and non-tariff barriers to the US to zero.

The United States has imposed a 50% tariff on India, including a 25% tariff on the purchase of Russian oil. Reuters reported earlier that overall tariffs had been reduced to 18%. Trump said India agreed to stop buying Russian oil and “buy more” from the U.S. during a phone call with Prime Minister Narendra Modi

Modi said in a post on

Citi Research said in a report on Tuesday that India is expected to be one of the first countries to sign a trade deal with the United States in early 2025, but due to the lack of “clear agreement”, “a rift has emerged between India’s strong macro economy and weak performance across asset classes”.

Trideep Bhattacharya, president of equities at Edelweiss Asset Management, said the tariff reduction was “significantly better than consensus expectations.”

“Combined with the recently concluded India-EU trade agreement, this could be one of the strongest external growth stimuli for the Indian economy in 2026,” she added.