Indian equity markets are likely to see a strong opening on Tuesday, driven by renewed optimism following a major trade agreement between India and the United States. Early cues from Gift Nifty indicate a sharp gap-up start, suggesting that benchmark indices could move close to their all-time highs.
The positive momentum comes after US President Donald Trump announced a trade deal that significantly reduces tariffs on Indian goods to 18% from the earlier 50%. In exchange, India has agreed to curb purchases of Russian oil and ease certain trade barriers. The agreement has removed a major overhang that had weighed on Indian markets for much of the past year.
According to global brokerage Citi Research, fears of India being diplomatically and economically isolated have now eased following successive trade agreements with the European Union and the United States. This has improved India’s global trade outlook and strengthened investor confidence.
Market participants believe the deal could help slow or reverse persistent foreign portfolio investor (FPI) outflows, which have crossed $23 billion so far in 2025. Heavy foreign selling had been a key reason behind Indian equities underperforming their Asian and emerging market peers.
Export-oriented sectors such as textiles, seafood, and gems and jewellery are expected to benefit the most, as lower US tariffs could support earnings and improve demand visibility. Overall, the trade breakthrough has lifted near-term market sentiment and set the stage for a strong start to the trading session.
