India-US trade deal ignites market rally, fuels growth outlook

New Delhi: US President Donald Trump on Monday announced a bilateral trade deal with India, slashing reciprocal tariffs on Indian goods from 25% to 18%. 

The agreement, finalised after a phone call between Trump and Prime Minister Narendra Modi, is being viewed by business and policy observers as a turning point with widespread implications for Indian exports, manufacturing, advertising and media.

The timing of the deal, coming after months of stalled negotiations and tariff escalations, sent Indian stock markets soaring. The BSE Sensex surged by over 4,200 points (5.14%), and the Nifty jumped nearly 1,253 points (4.99%) in intraday trade on Tuesday. 

The Indian rupee also strengthened by 119 paise to 90.30 against the US dollar. Exporters hailed the development as a potential revival signal for India's global competitiveness.

With the US agreeing to immediately reduce tariffs and India committing to slashing non-tariff barriers and increasing purchases of American goods, the move is expected to increase bilateral trade flows and revive capital inflows.

"The dramatic announcement is a game-changer for Indian markets. The US-India trade deal, coupled with a growth-oriented Budget, boosts sentiment across industries," said VK Vijayakumar, Chief Investment Strategist at Geojit.

Commerce Minister Piyush Goyal called the agreement a "landmark opportunity" for MSMEs, farmers, and manufacturers. "It fuels Make in India, Design in India and Innovate in India for the world," he said. Industry leaders expect a ripple effect on sectors such as apparel, leather, marine, footwear and more.

With consumer demand projected to grow and global buyers re-evaluating sourcing destinations, advertisers and brand marketers anticipate renewed traction. “Tariff parity gives Indian brands a better shot at export competitiveness, and as exports rise, so will the need for brand-building across markets,” said a leading agency head. 

Experts also suggest that with improved currency sentiment and FII re-entry likely, AdEx could gain steam in H2 FY26.

The trade deal also reduces India’s tariff disadvantage vis-a-vis export peers like Vietnam, Bangladesh and China. With the new rate (18%) undercutting US tariffs on several Asian suppliers, India has now gained a critical edge.

President Trump underlined the strategic element too, stating that the agreement would reorient India’s energy procurement away from Russia and deepen technology and agriculture links. "Prime Minister Modi and I are two people who get things done," Trump posted, calling the $500 billion+ US export deal part of a trust-based partnership.

Analysts predict that global product brands entering India may allocate larger budgets for domestic storytelling, while Indian firms will explore global market narratives.

As commerce opens up and investor outlook improves, marketing and advertising budgets are also likely to get a lift. "An upward re-rating of exports and stock sentiment will raise investor and advertiser confidence. We expect increased campaign activity from export-led FMCG, apparel, pharma, agri-tech and D2C firms in Q1 FY27," said a digital media investment expert.

The rupee’s rally further supports this outlook. Forex strategists believe that the 18% tariff regime puts India in a favourable light among global allocators, giving a nudge to advertising-led growth models.

As the two largest democracies deepen ties, the trade breakthrough not only enhances India's external trade but also has the potential to reshape its internal growth levers, from MSME expansion and Make-in-India to advertising revival and global storytelling.