Benchmark stock market indices Sensex and Nifty are expected to open higher on Friday, according to Gift Nifty, following an overnight meeting between Indian Prime Minister Narendra Modi and US President Donald Trump, during which the two announced plans to finalize "some wonderful trade deals" between India and the US.
The Gift Nifty was last quoted at 23,194 on NSEIX, up 97.50 points or 0.42 percent, indicating a gap-up opening for the index. Market participants were closely monitoring the outcome of the Trump-Modi talks for any trade and tariff concessions that could lead to a pullback rally.
PM Modi and Trump discussed broadening their bilateral partnership, including in energy, defense, and critical technology. They also issued brief statements to the US media a few hours after the US President announced a new reciprocal tariff policy for all of the US's trading partners.
Trump stated that his administration will work closely with India and announce a few major trade deals in the near future. This includes oil and gas purchases from the United States. The two countries hope to increase bilateral trade to $500 billion by 2030 from $129.2 billion in 2024.
The Dow Jones Industrial Average rose 342.87 points, or 0.77 percent, to 44,711.43. The S&P 500 increased by more than 1%. Asian markets were mixed earlier today, with Japan and mainland China falling while Hong Kong and Korea rose.
According to a recent note from Nomura, India has significantly higher relative tariff rates and is subject to reciprocal tariffs. The United States accounts for 18% of India's total exports (2.2% of GDP as of FY24) and is India's largest export destination, with the India-US trade surplus increasing in recent years to a high of $38 billion by 2024.
According to Nomura, India aimed to avoid a confrontation with the United States. The recently announced Budget 2025 reduced import duties on a wide range of products, including electronics and textiles, as well as high-end motorcycles. India also gave the Trump administration an early political boost by agreeing to return over 100 illegal immigrants.
"It is also proactively considering reducing tariffs on over 30 items, including luxury vehicles, solar cells and chemicals," according to Nomura India. India plans to engage with the United States and attract more supply chains to the country in the medium term.
