3 min readMumbaiFeb 3, 2026 10:10 AM IST
American Depositary Receipts (ADRs) of Indian companies listed on the Nasdaq and New York Stock Exchange on the Wall Street jumped by up to 6.75 per cent after the US agreed to reduce the reciprocal tariff it levies on India from 50 per cent to 18 per cent in a major improvement in bilateral economic ties. Indian markets – BSE and NSE – which are supposed to open later today are expected to witness a rally as the deal is expected to boost the trade ties between the two countries.
While Infosys ADR rose by 4.32 per cent, Wipro jumped by 6.75 per cent on the Nasdaq on Monday. ICICI ADR increased by 4.95 per cent and HDFC by 4.35 per cent. Dr Reddy’s gained 1.42 per cent.
Gift Nifty, a US-dollar-denominated derivative futures contract based on India’s flagship equity index, Nifty 50, and listed on the NSE International Exchange (NSE IX), rose by 2.87 per cent at 25,857.
The market is expected to cheer the deal announcement — first made by the US President – to mark a significant shift in India-US trade policy following months of tariff-driven trade tensions. Washington had slapped 25 per cent import tax on Indian goods as part of its Liberation Day tariffs last year, and an additional 25 per cent for India’s import of Russian oil, making India among the highest tariffed countries.
Sensex, Nifty set for rally
Analysts expect major indices – Sensex and Nifty – to gain by at least 2 per cent on Tuesday. “Indian markets are likely to open on a strong positive note today, supported by upbeat global cues following the announcement of a key India–US trade deal. The reduction in reciprocal tariffs on Indian goods has significantly lifted global risk sentiment, with GIFT Nifty indicating a sharp gap-up opening, nearly 3 per cent higher overnight,” said Ponmudi R, CEO of Enrich Money, a SEBI registered online trading firm.
Indian markets ended over 1.42 per cent, or 943.52 points, higher at 81,666.46 higher on Monday, regaining more than half the rout it suffered post the Union Budget 2026-27 on Sunday when investors had been spooked by the unexpected proposal to hike the securities transaction tax (STT) on the futures and options (F&O) segment.
The Sensex had fallen 5.21 per cent from 52-week high level recorded on December 1, 2025. The US imposed a 50 percent duty on many Indian goods as part of a steep escalation in trade tensions tied to India’s continued purchases of Russian oil. This combined 50 per cent rate came into effect on August 27, 2025
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Trideep Bhattacharya, President and CIO, Equities Edelweiss MF, said, “The reduction in tariffs from around 50 per cent to 18 per cent has come in materially better than consensus expectations. When combined with the recently concluded India–EU trade agreement, this potentially represents one of the strongest external growth stimuli for the Indian economy in 2026.
“Overall, the trade deal offers a strong near-term sentiment boost, particularly for export-oriented and manufacturing sectors, while continued government focus on capex provides a steady underlying support for the broader market,” Ponmudi said.
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