Gokaldas to KPR Mill: Textile stocks soar up to 20% on India-US trade deal

US President Donald Trump said he would lower his 50 per cent tariff on Indian goods to 18 per cent after India agreed to stop buying Russian oil

Shares of textile companies extended their bullish momentum on Tuesday, driven by back-to-back positive news, with the latest rally sparked by the India-US trade deal. 

 

India and the US, after months of negotiations, reached a trade agreement. US President Donald Trump said he would lower his 25 per cent tariff on Indian goods to 18 per cent after India agreed to stop buying Russian oil. The extra 25 per cent duty on the purchase of Russian oil will also be removed. 

 

Prime Minister Narendra Modi, in his post on X, said: "Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement."

 

 

The agreement came more than five months after Washington imposed 50 per cent tariffs on several Indian exports, including a 25 per cent punitive duty for India’s purchase of Russian crude oil.  CATCH STOCK MARKET UPDATES TODAY LIVE | TOP GAINERS TODAY

Share prices of textile companies

Shares of textile companies surged up to 20 per cent on the NSE. Among individual stocks, Gokaldas Exports, Kitex Garments, Trident and KPR Mill rose 20 per cent, each on Tuesday. Shares of Arvind rose as much as 19 per cent, while Alok Industries rallied 12 per cent. 

 

As of 10:15 AM, Trident was up 10 per cent, KPR Mill was higher by 16 per cent, compared to a 2.3 per cent advance in the benchmark Nifty50 index. Alok Industries' shares were up 6 per cent, while Arvind was up 11 per cent. 

The Nifty index rose as much as 4.99 per cent, or 1,252.8 points, to 26,341, while the 30-stock Sensex advanced 5.15 per cent, or 4,205.2 points, to 85,871, notching the steepest intraday gains since February 1, 2021.   ALSO READ | M&M, Tata Motors, TVS Motor: Nifty Auto rallies 3% on India-US trade deal

Budget, EU FTA boost for textile stocks

On Monday, textile companies' stocks rallied after Finance Minister Nirmala Sitharaman, in the Union Budget on Sunday, said that the government proposes to set up mega textile parks to focus on value addition in technical textiles. Alongside this, the Budget proposed an integrated textile programme with five sub-parts, bringing various existing schemes under one umbrella to improve efficiency and coordination.

 

Further, India and the European Union (EU) signed a free trade agreement (FTA) last week, after negotiation which lasted for more than a decade. The FTA, after it becomes operational, will eliminate import tariffs to zero on Indian textiles and apparel products, boosting investor sentiment.