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Below the Quote on India & US Finally Reach A Consensus- US Tariff Lowered From 50% to 18% by Ankita Pathak, Ionic Wealth

India and the US have finally reached a consensus on a long-pending trade agreement, with US tariffs on Indian exports reduced sharply from 50% to 18%. The development comes at a critical juncture, as domestic fundamentals—including corporate earnings and macro indicators—are showing early signs of recovery after a prolonged period of stress. With trade-related uncertainty now easing, market sentiment is expected to improve, though execution and adherence to agreed terms will remain key.

Ankita Pathak, Head – Global Investments, Ionic Asset, shares her perspective in the latest edition of Cues in the News. Please find the detailed note attached, along with the key highlights below:

Ionic Wealth View
India & US Trade Deal: Tariff Relief at an Opportune Time
The trade deal, alongside the Union Budget, marks a major clearing event for domestic equities. Both developments favour the real economy, labour-intensive sectors and export-led growth, which could lead to a broadening of market participation. While lower tariffs versus China and a more competitive INR support export-oriented sectors, sustained benefits will depend on corporate execution and the absence of further trade surprises.

Please find the detailed note attached, along with the key highlights below:

Key Highlights – India–US Trade Deal

Trade Terms
US tariffs on Indian exports reduced from 50% to 18%, providing meaningful relief to export-oriented companies.
India has agreed to lower tariffs and non-tariff barriers on US imports to near zero.

Sectoral Impact
Labour-intensive sectors such as textiles, gems & jewellery and garments are likely to benefit the most.
Electronics and pharmaceuticals remain largely unaffected, having already been exempt.
Chemicals could gain from a combination of lower tariffs and a weaker INR versus CNY, potentially shifting US import dependence away from China.

Macro & Market Implications
The deal is sentimentally positive for domestic equities, which have underperformed global markets amid persistent FPI outflows.
Tariff relief is expected to ease pressure on the current account and support exports over the medium term.

Risks & Considerations
Opening up agriculture to higher imports at negligible or zero tariffs could pose a drag on sectoral growth and farmer incomes.
Successful outcomes will depend on execution and stability in future trade terms.

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