On Tuesday, February 3, 2026, the Indian stock market witnessed a historic surge as the BSE Sensex skyrocketed by over 3,600 points and the Nifty 50 jumped nearly 1,200 points during early trade.

This unprecedented rally was triggered by the announcement of a landmark trade agreement between Prime Minister Narendra Modi and US President Donald Trump, which slashes tariffs on Indian exports from 50 per cent to 18 per cent.

The deal effectively removes a 25 per cent punitive levy previously imposed due to India’s Russian oil imports, alongside a reduction in the reciprocal tariff.

While market sentiment has reached a fever pitch, latest developments indicate that the agreement includes India’s commitment to halt Russian oil purchases and purchase over 500 billion dollars in American energy and technology.

Stock Market Amid India-US Deal

The massive market rebound follows a year of grueling negotiations and high economic stakes. In 2025, the Trump administration had placed a “hanging sword” over Indian markets by imposing a combined 50 per cent tariff wall, which severely impacted labor intensive sectors like textiles and gems.

Following the announcement of an India-EU trade pact and a growth oriented Union Budget, this US deal is being hailed by analysts as a “game changer” for the Indian economy.

By aligning India’s tariff rates with or below those of regional peers like Vietnam and Bangladesh, the agreement significantly improves price competitiveness for “Made in India” products in their largest export destination, potentially boosting India’s growth rate to 7.5 per cent in the coming fiscal year.

Sensex Soars

The surge on Dalal Street reflected a broad based recovery, with the BSE Sensex crossing the 85,000 mark and the Nifty 50 hitting a record high of 26,308 points. Finance Minister Nirmala Sitharaman welcomed the development, stating that the reduction would provide a massive stimulus to Indian manufacturing and export prospects.

Prime Minister Modi expressed his gratitude on social media, thanking President Trump on behalf of 1.4 billion people for the “wonderful announcement.”

US Ambassador Sergio Gor highlighted the “limitless potential” of the partnership, while US leaders noted that the deal helps counter Russian influence by shifting India’s energy focus toward the US and potentially Venezuela.

However, some domestic critics have raised questions regarding the long term impact on India’s agricultural sector and strategic autonomy.

India-US Trade Deal

The historic India-US trade deal, finalised on 2 February 2026, marks a seismic shift in global trade dynamics. Following a 30-minute call between Prime Minister Narendra Modi and US President Donald Trump, the US slashed total tariffs on Indian exports from a punitive 50% to a reciprocal 18%.

This breakthrough was contingent on India reportedly agreeing to halt Russian oil imports and pivot towards American and Venezuelan energy.

In exchange, India has committed to purchasing over $500 billion in US energy, technology, and agricultural products while moving towards “zero” tariffs on American goods. This strategic realignment positions India as a primary alternative to China in the global supply chain.

The Logical Indian’s Perspective

At The Logical Indian, we believe that while the record breaking numbers on stock tickers provide a sense of national pride, the true merit of any trade deal lies in its human impact.

The relief for exporters and the potential for job creation are welcome steps toward economic stability; however, true partnership should never come at the cost of a nation’s sovereign right to choose its own energy and strategic partners.

While we celebrate the thawing of ties and the spirit of dialogue, we must also ensure that the “Buy American” commitments do not overshadow the need to protect our own farmers and small scale industries.

A balanced approach to trade, rooted in mutual respect and empathy for the working class, is what will truly foster long term harmony and shared prosperity.

Also Read: India–US Trade Deal Boosts Markets: Rupee Jumps 119 Paise to 90.3 in Early Trade