India-US Trade Deal: Jefferies Bets on Tariff Cuts, FPI Inflows, and Key Sector Gains

• The India-US trade deal significantly reduces tariff barriers, cutting tariffs on India's exports to the US from 50% to 18% and on US exports to India to zero (excluding most agricultural products).
• This agreement brings India's effective tariffs 1-2 percentage points lower than competitors like Pakistan and Vietnam, benefiting labor-intensive exports such as textiles, leather goods, gems, and jewelry.
• Jefferies identifies auto ancillaries, solar manufacturing, chemicals, textiles, and Adani Group companies as key beneficiaries, adding Eternal to its model portfolio while increasing metals exposure and trimming IT stocks.
• The deal is expected to improve the rupee outlook and potentially trigger renewed FPI inflows, which have seen $34 billion withdrawn from Indian markets over the past 16 months.
• Specific stock picks include Sona Comstar, Bharat Forge, Navin Fluorine, PI Industries, SRF, Waaree, Premier Energies, Emmvee, Welspun Living, Hindustan Zinc, and JSW Steel.

Why It Matters: The India-US trade deal is a major positive, reducing tariffs, boosting FPI sentiment, and benefiting key sectors.