India's Stock Market Rallies on Buoyant Sentiment Following U.S. Tariff Reduction

BlockchainTherapist · 2026-02-18T17:08:36+00:00

The U.S. tariff reduction on Indian goods from 25% to 18% boosted Indian equity markets, with the BSE Sensex gaining 2.7%. Prime Minister Modi and Union Minister Gadkari praised the agreement as a step towards stronger U.S.-India relations, enhancing investor confidence and market performance across diverse sectors.

BlockchainTherapist

2026-02-18 17:08:36

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After U.S. President Donald Trump announced a significant reduction in reciprocal tariffs on Indian goods—lowering them to 18 percent from the previous 25 percent—Indian equity markets responded with strong upward momentum on Tuesday. A White House official confirmed that the agreement includes the removal of Russian oil-linked tariffs, with other tariffs adjusted to align with the 18 percent rate. The decision immediately improved market sentiment, with investors viewing the tariff accord as a positive development for bilateral trade relations and corporate profitability.

Trade Agreement Strengthens Business Outlook

Prime Minister Narendra Modi welcomed the tariff reduction, stating that the agreement reflects the growing confidence and mutual trust between the two nations. “Self-confidence is that power with the help of which everything is possible. This very power of the countrymen will prove extremely useful in realizing the dream of a developed India,” Modi expressed in a post on X. Union Minister Nitin Gadkari reinforced this optimistic tone, noting that the accord will cement stronger ties between India and the U.S., and will materially elevate confidence in business, trade, and investment sectors.

Market Shows Robust Performance

The buoyant market sentiment translated into impressive gains across India’s key equity indices. The benchmark BSE Sensex climbed 2,240 points, representing a 2.7 percent gain, reaching 83,907 in early trading. The broader NSE Nifty index advanced by 690 points, or 2.8 percent, settling at 25,778. This synchronized rally across both major indices underscored broad-based investor optimism regarding the trade accord’s positive implications for the Indian economy.

Strong Sector-Wide Gains Drive Rally

Leading the market advances were companies across diverse sectors. Automotive giant Mahindra & Mahindra, energy leader Reliance Industries, infrastructure player Larsen & Toubro, financial services firms Axis Bank, Bajaj FinServ, and Bajaj Finance, pharmaceutical company Sun Pharma, aviation operator Indigo, and port operator Adani Ports collectively soared between 4 and 8 percent. The strength in these blue-chip stocks reflected investor confidence that the tariff arrangement will benefit India’s competitive positioning in global trade and support domestic corporate expansion.

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