Indian ADRs Surge Up to 6.75% on Wall Street Following Major US-India Trade Agreement
American Depositary Receipts (ADRs) of Indian companies listed on the Nasdaq and New York Stock Exchange experienced a significant rally on Monday, with gains reaching as high as 6.75%. This surge came in response to a landmark trade agreement between the United States and India, which saw the US agree to reduce reciprocal tariffs on Indian goods from 50% to 18%. This move marks a substantial improvement in bilateral economic relations and has injected optimism into financial markets.
Key Performers in the ADR Market
The positive sentiment was reflected across several major Indian ADRs. Wipro led the charge with an impressive jump of 6.75% on the Nasdaq. Infosys followed closely, rising by 4.32%, while ICICI Bank and HDFC Bank saw increases of 4.95% and 4.35% respectively. Even Dr Reddy's Laboratories posted a gain of 1.42%, indicating broad-based enthusiasm among investors.
Domestic Markets Poised for Strong Opening
Indian domestic markets are expected to mirror this bullish trend when they open later today. The Gift Nifty, a US-dollar-denominated derivative futures contract based on India's Nifty 50 index, rose by 2.87% to 25,857, signaling a strong positive opening for the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Analysts predict that major indices like the Sensex and Nifty could gain at least 2% on Tuesday, driven by the improved trade outlook.
Background and Market Context
The tariff reduction deal represents a significant shift in India-US trade policy, coming after months of escalating trade tensions. Previously, Washington had imposed a 25% import tax on Indian goods as part of its Liberation Day tariffs last year, with an additional 25% levy on India's imports of Russian oil. This had positioned India among the highest-tariffed countries, creating friction in economic ties.
Market experts view this development as a major positive. "The reduction in tariffs from around 50% to 18% has come in materially better than consensus expectations," noted Trideep Bhattacharya, President and CIO of Equities at Edelweiss MF. "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."
Broader Implications for Indian Economy
This trade deal is expected to provide a strong near-term sentiment boost, particularly benefiting export-oriented and manufacturing sectors. Ponmudi R, CEO of Enrich Money, highlighted that "the reduction in reciprocal tariffs on Indian goods has significantly lifted global risk sentiment." He added that continued government focus on capital expenditure offers steady underlying support for the broader market.
The announcement comes at a crucial time for Indian markets, which had recently faced volatility. On Monday, the Sensex ended over 1.42% higher at 81,666.46, recovering more than half of the losses incurred after the Union Budget 2026-27 proposed an unexpected hike in the securities transaction tax on the futures and options segment.
Overall, the US-India tariff reduction deal is seen as a pivotal moment that could enhance trade ties, stimulate economic growth, and bolster investor confidence in both international and domestic markets.
