Here's who analysts expect to gain from India's U.S. and EU trade deals

Trade Agreement Overview - The trade pact between India and the U.S. will reduce tariffs on Indian exports from 25% to 18% [1] - India has agreed to cease purchasing Russian crude oil and will instead buy oil from the U.S. and potentially Venezuela, while committing to purchase $500 billion in various products [2] Sector Impacts - India's manufacturing sector is expected to be a major initial beneficiary of the new trade deal, with potential boosts for the I.T. and pharmaceutical sectors [3] - The labor-intensive export sector, including textiles, clothing, leather, jewelry, toys, and furniture, may regain competitiveness against regional rivals due to the lower tariff rate [4] - Smaller and medium-sized companies are likely to benefit from the new 18% tariff rate, which is more favorable compared to Pakistan (19%) and Vietnam and Bangladesh (20%) [5] Market Sentiment and Financial Sector - The removal of the tariff overhang is anticipated to support banks, non-banking financial companies, and export-oriented manufacturers, while enhancing retail sentiment in small and mid-cap stocks [5] - The trade deal is seen as a positive development for Indian equities, particularly in financials, I.T., and telecom sectors, with expectations of a short-term rebound [9] International Relations and Strategic Positioning - The recent India-EU treaty likely accelerated the U.S.-India deal, aligning India more closely with its ASEAN peers and improving its competitive position relative to China [6] - Improved U.S.-India relations are expected to reduce scrutiny on I.T. services and lower the risk of punitive actions, benefiting the I.T. sector [8] Pharmaceutical Sector Growth - The elimination of 11% tariffs on EU drug imports is projected to significantly benefit India's pharmaceutical sector, with a market growth forecast from $31.2 billion in 2025 to $45.7 billion by 2035 [10][12] - The trade agreement is expected to help Indian firms diversify export destinations and improve regulatory compliance processes, potentially reversing recent stagnation in pharmaceutical exports [12][13] Market Reactions - Following the trade deal, the Sensex index rose by 2.5%, indicating improved market sentiment and clarity for investors [14] - U.K.-listed investment trusts with exposure to India also saw gains, reflecting positive investor reactions to the trade agreement [14] - The trade deal is viewed as a potential catalyst for renewed momentum in the Indian market, which had previously been stalled by tariff regimes [15]