Sensex, Nifty Explode in Historic Rally as India-US Trade Deal Slashes Tariffs to 18%

The Indian stock market witnessed an unprecedented "super Tuesday" on February 3, 2026, as the Sensex and Nifty staged a historic rally following the announcement of a landmark India-US trade deal. In a move that has sent shockwaves of optimism through Dalal Street, US President Donald Trump confirmed a significant reduction in reciprocal tariffs, effectively ending months of trade friction between the two global giants.

The 30-share BSE Sensex skyrocketed by over 4,200 points to reach an intraday high of 85,871.73, while the NSE Nifty 50 surged by 1,252 points, crossing the 26,340 mark. This massive jump added approximately ₹13 lakh crore to investor wealth within the first hour of trade.

The Breakthrough: Trump-Modi Phone Call Seals the Deal

The market explosion was triggered by a social media announcement from President Donald Trump following a high-level phone call with Prime Minister Narendra Modi. Under the new agreement:

• Tariff Reduction: US reciprocal tariffs on Indian goods have been slashed from a staggering 50% (which included a 25% penalty for Russian oil purchases) down to a flat 18%.

• "Buy American" Commitment: India has reportedly pledged to purchase over $500 billion in American energy, technology, and agricultural products.

• Russian Oil Shift: Reports suggest India has agreed to halt the purchase of Russian crude oil in favor of American and potentially Venezuelan energy sources.

Prime Minister Modi hailed the announcement on 'X', thanking his "dear friend" President Trump for the move, noting that it would unlock "immense opportunities" for the 1.4 billion people of India.

Sectoral Surge: Textiles and Realty Lead the Pack

The India-US trade deal has acted as a massive catalyst for export-oriented sectors. The Nifty Realty index was the top performer, jumping over 4.6%, while the textile and leather sectors saw some stocks hitting the 20% upper circuit.

Industry experts believe we are entering a "Goldilocks period." Anant Goenka, President of FICCI, noted that the combination of this deal, the India-EU FTA, and a stable Union Budget has unleashed "animal spirits" in the Indian economy.

Political Friction: Tharoor and Opposition Demand Clarity

Despite the market euphoria, the deal has faced a wall of criticism from the Opposition. Speaking on the developments, Congress MP Shashi Tharoor expressed a cautious stance, stating, "We would love to celebrate if it's good news, but give us clarity." Tharoor and other leaders have raised concerns over the lack of a formal government statement in Parliament, relying instead on Trump’s social media posts.

Other opposition voices were more vocal in their dissent:

• Sanjay Singh (AAP): Labeled the deal a "betrayal" of Indian farmers due to potential zero-duty imports of US agricultural goods.

• Sanjay Raut (Shiv Sena UBT): Alleged the deal was designed to "safeguard" specific corporate interests rather than the national interest.

Expert Outlook: Is This a Sustainable Bull Run?

With the Indian Rupee also gaining 119 paise to reach 90.30 against the dollar, the sentiment is overwhelmingly positive. Ashish Chauhan, MD and CEO of the NSE, believes this deal will trigger a massive return of Foreign Institutional Investors (FIIs) who have been net sellers in recent months.

Key Takeaways for Investors:

1. Export Winners: Focus on textiles, gems, and engineering goods as lower US tariffs boost margins.

2. Energy Pivot: Keep a close watch on energy stocks as India shifts its sourcing from Russia to the US.

3. Market Volatility: While the rally is historic, stay alert for official government documentation to confirm the fine print of the agricultural and oil agreements.