Which Stocks Will Gain After US-India Trade Deal?

With positive sentiments about US-India trade deal, several stocks have already seen an increase in their valuation in past few days

After US President Donald Trump announced tariffs on imports, there was a lot of anxiety among Indian business entities. However, recent days have been positive, as reports indicate that the US-India trade deal could be announced in the next few days.

If that turns out to be true, several Indian stocks can see their valuation rise in the near future. A US-India trade deal will ensure lower or no tariffs and free access to the large US market. Let us take a look at some stocks that will benefit from the US-India trade deal.

Pharmaceutical stocks – Since the United States imports large amounts of pharmaceutical products from India, a US-India trade deal can be hugely beneficial for pharmaceutical companies in India. Tariffs on pharma products can be reduced or removed completely under the US-India trade deal. This will benefit pharma companies that have a strong presence in the US market.

Some of the Indian pharmaceutical companies with significant presence in the United States include Sun Pharmaceutical Industries Ltd., Cipla Ltd. and Aurobindo Pharma Ltd. Stocks of these companies and others can gain if the US-India trade deal is approved.

Automobile stocks – In the automotive space, only some select brands have a sizable presence in the United States. One relevant example is Jaguar Land Rover (JLR) that derives 23% of its sales from the US. If the US-India trade deal is approved, tariffs on auto parts can be significantly reduced. Stocks of Tata Motors Ltd., which owns JLR, can see its stock prices move up if the trade deal is approved.

Another sector to benefit from the US-India trade deal will be auto ancillary units with a strong exports portfolio to the United States. A relevant example is Samvardhana Motherson International Ltd., a leading global supplier to various markets including the US.

Textile industry stocks – US is a major importer of textile products. As of now, the US does not have enough labor to produce textiles in a cost-effective manner. With lower tariffs, as possible with the US-India trade deal, textile exports to the United States could see a boom.

Indian companies can offer much better prices after tariff reduction, as compared to Bangladesh and Vietnam that are facing higher tariffs. Indian textile stocks that can benefit from the US-India trade deal include Vardhman Textiles Ltd. and KPR Mill Ltd.

Other stocks to gain post US-India trade deal

Indian companies in sectors like chemicals, gems and jewelry and renewables can see their stock prices rise after the US-India trade deal. In this context, stocks like Tata Chemicals Ltd., Titan Company Ltd. and Adani green Energy Ltd. could see positive upward movement.

DISCLAIMER – This article is for informational purposes only and does not constitute financial advice. Always conduct your own research or consult a SEBI-registered professional before making any investment decisions. Investments are subject to market risks.