Nifty may scale ATH as Trump may lower tariffs on India soon

 

·         Trump may impose 20% tariffs on Indian goods; considering the average US state sales tax of 7.5%, the total tax would be ~27.5%

·         India has to impose 15% tariffs on US goods; considering IGST of 12.5%, the total tax would be 27.5%

·         Trump may also soon withdraw the 25% levy on India for Russian oil

·         India has to allow US agri exports into the country and remove all types of non-tariff barriers on US goods

India’s benchmark stock index Nifty surged almost 2% since last week (November 9, 2025) on better-than-expected election win by BJP/NDA (Modi admin) in the Bihar state election and hopes of an imminent withdrawal of the 25% additional tariff on Russian oil. The uptick has been fueled by two major developments: the BJP-led National Democratic Alliance's (NDA) landslide victory in the Bihar Assembly elections and mounting optimism around an impending India-US trade deal. These factors have eased political uncertainty and boosted investor confidence in policy continuity and export growth.

Will Modi now sign any BTA with the US after the Bihar election, which may compromise his vote bank?

Now, from politics to economics and Trump tariffs, a recent report from *Deccan Chronicle* highlights a significant development in India-US trade relations: an upcoming bilateral trade agreement (BTA) expected to be finalized and announced before the end of November 2025. This deal marks a key step in resolving ongoing tariff disputes and enhancing agricultural trade between the two nations. It comes amid eased tensions over India's reduced imports of Russian oil, which has prompted the US to withdraw penalty tariffs.

Key Details of the potential trade deal, BTA, between the US and India

Agri & Dairy Products Involved:

·         Soybean: Duty-free imports of non-genetically modified soybeans directly from US producers. Notably, the US is not aggressively pushing for large-scale purchases from India now, as China remains the primary market absorbing US soybean exports.

·         Corn: Imports focused on supporting India's ethanol production initiatives, allowing duty-free access to bolster domestic biofuel efforts.

·         Dairy Products: Select dairy items (excluding liquid milk) will enter India duty-free, with built-in safeguards to protect local farmers from market disruptions.

Timeline and Context:

·         Negotiations have accelerated following India's sharp decline in Russian oil imports starting in October 2023, with further reductions anticipated from November due to upcoming US sanctions on Russian oil entities

·         US President Donald Trump has reportedly acknowledged India's compliance on the oil front, paving the way for the tariff withdrawal.

·         The agreement addresses long-standing sticking points in the agricultural and dairy sectors, which had been major hurdles in broader trade talks.

Tariff Negotiations:

·         India is pushing for reciprocal tariffs on US goods in the range of 12-15%, aiming to secure rates lower than those imposed on most Asian countries (19-20%) and even undercutting the EU's 15% benchmark.

·         An alternative range of 15-19% is under discussion, but Indian negotiators are advocating for the lower option to maximize competitive advantages.

Potential Impacts

·         On Trade and Economy: The deal could significantly boost US agricultural exports to India while providing Indian industries (e.g., ethanol production) with cost-effective raw materials. It strengthens bilateral ties, potentially increasing overall trade volume without overwhelming India's domestic markets.

·         On Agriculture: Safeguards for dairy and other sectors aim to shield Indian farmers, addressing concerns over import surges. This balanced approach could set a precedent for future agro-trade pacts.

·         Broader Implications: By resolving the Russian oil penalty issue, the agreement signals improved geopolitical alignment between India and the US, amid global energy and trade shifts.

Latest Update on US-India Trade Talks: Momentum Builds Toward Year-End Breakthrough

As of November 17, 2025, the US-India bilateral trade negotiations have gained significant traction, with officials on both sides signaling that the first phase of a landmark agreement could be finalized within days or weeks—potentially before the end of November. This surge in progress follows months of high-level directives from Prime Minister Narendra Modi and President Donald Trump, who in February set a November deadline for the initial tranche, emphasizing reciprocal benefits amid strained ties over tariffs and energy imports.

The talks, which wrapped up their latest round in mid-October, are now laser-focused on resolving the 50% punitive tariffs imposed by the Trump administration in August on Indian goods, including a 25% additional levy tied to India's Russian oil purchases. In a major thaw, Trump acknowledged on November 7 that India has "largely stopped buying oil from Russia," paving the way for tariff relief—potentially dropping rates to 15-16% on key US exports like soybeans, corn, and dairy, while exempting India from broader 26% suspended duties. White House economic advisor Kevin Hassett echoed this optimism on November 17, stating the US is "very close to reaching a deal with India," highlighting smoother market access for American agricultural products and motorcycles, alongside India's push for greater US visa quotas for IT professionals and restored preferential trade status.

From New Delhi's perspective, Commerce Minister Piyush Goyal confirmed "serious progress" in a November 14 briefing, noting that both nations are "satisfied" with the pace since March. The first tranche, designed to be fully WTO-compliant, targets agriculture, automobiles, and services—aiming to double bilateral trade from $191 billion to $500 billion by 2030. A key sweetener: Indian state-run oil firms have inked a one-year deal to import 10% of their LPG needs from the US starting 2026, signaling deeper energy diversification and goodwill.

NITI Aayog CEO B.V.R. Subrahmanyam added fuel on November 7, projecting a "breakthrough by the end of the month," while Commerce Secretary Sunil Barthwal reiterated on November 17 that the "first tranche nears closure," with reciprocal tariffs (India offering cuts on US goods in the 12-15% range) as the linchpin.

Challenges linger—technology transfers, IP protections, and India's $50 billion-plus Russian oil imports remain sticking points—but the vibe is collaborative. Trump even hinted at a potential India visit in mid-2026 to seal the momentum. If inked soon, this deal could inject $50-100 billion into annual trade flows, fortifying the world's largest and fifth-largest economies against global headwinds. With the holiday season looming, all eyes are on a formal announcement—perhaps as early as this week—that could redefine Indo-US economic ties for the decade.

Recent Comments by Trump and His Trade Officials on US-India Trade Deal

As of November 18, 2025, President Donald Trump and key administration officials have ramped up optimistic rhetoric on the impending US-India trade agreement, with indications of a breakthrough in the first phase potentially materializing before the month's end. The comments, largely from mid-November, center on tariff reductions tied to India's curtailment of Russian oil imports and enhanced US market access in agriculture and energy.

President Trump's Comments

Trump has been vocal since early November, framing the deal as a "fair" resolution to past imbalances while crediting India's compliance on energy sourcing.

v  November 10, 2025 (White House Press Briefing): "The United States was getting close to reaching a deal with India that would expand economic and security ties between the two countries; boost U.S. energy exports and promote investments in key U.S. sectors." He added, "Right now, the tariffs are very high on India because of the Russian oil, and they [India] have stopped doing the Russian oil… It’s being reduced very substantially. Yeah, we will bring the tariffs down at some point."

v  November 10, 2025 (During Sergio Gor's Swearing-In as US Ambassador to India): "At some point [we] would reduce the tariff rate on Indian goods, saying the US was getting ‘pretty close’ to a trade deal with New Delhi." Trump hinted at a broader thaw, noting, "We are very close to something that could make a real difference."

v  November 11, 2025 (Follow-Up Remarks on Trade Progress): Anticipating a "very different deal" with India for "fair trade after past 'unfair' agreements," Trump quipped that once signed, "Right now—India doesn’t love me too much—but they’ll love us again." He reiterated tariff cuts to 15-16% from the current 50%, signaling no major hurdles remain.

These statements align with Trump's February 2025 joint pledge with PM Narendra Modi to finalize a Bilateral Trade Agreement (BTA) by fall, emphasizing WTO compliance and reciprocal benefits.

Comments from Trump Trade Officials

Trump's inner circle, including economic advisors and the incoming ambassador, has echoed the president's tone, focusing on near-term closure and strategic wins.

v  Kevin Hassett (White House Economic Advisor), November 17, 2025: In a CNBC interview, Hassett stated, "We are very close to reaching a deal with India." He highlighted progress on agricultural exports (soybeans, corn, dairy) and US visa expansions for Indian IT workers, noting the deal's potential to "make a real difference" in bilateral trade, currently at $191 billion annually.

v  We are close to a deal with India; I spoke to the ambassador. It's a complicated situation because of the interaction between what India does with Russia and what India does with the US. I think we are still quite hopeful, but it got pretty complicated because we have many variables in the India-US relationship. But we are good friends, and we are hoping we can work it out soon.

v  Sergio Gor (US Ambassador to India, Sworn In November 10, 2025): During his Oval Office ceremony, Gor—Trump's longtime loyalist—reinforced the thaw, saying the appointment underscores a "personal approach to diplomacy" amid trade frictions. He affirmed that tariff reductions are "on the table" as India diversifies energy imports, including a new one-year US LPG contract for 2.2 million tonnes (10% of India's annual needs). Gor hinted at Trump's potential mid-2026 India visit to "seal the momentum."

v  No direct quotes from USTR Katherine Tai emerged in the latest cycle, but officials via PTI on November 17 confirmed the first phase is "nearing closure," addressing the 50% tariffs and US market access while safeguarding Indian farmers.

Context and Outlook

These remarks come amid India's October exports rebound to $6.3 billion (up after four months of tariff-induced decline) and the LPG deal announcement by Oil Minister Hardeep Singh Puri on November 17, framed as a "historic first" for diversification. Analysts project the agreement could add $50-100 billion to annual trade flows, targeting $500 billion by 2030. While sticking points like IP and tech transfers persist, the consensus is collaborative, with a formal announcement eyed for late November.

Recent Comments by Indian Commerce Minister and Other Indian Trade Officials on US-India Trade Deal

As of November 17, 2025, Indian officials, led by Commerce and Industry Minister Piyush Goyal and Commerce Secretary Sunil Barthwal, have maintained a cautiously optimistic tone on the ongoing US-India bilateral trade negotiations. With five rounds of official talks completed since March and the first tranche targeted for closure by the end of November, emphasis remains on safeguarding sensitive sectors like agriculture and dairy while pursuing reciprocal benefits.

Commerce and Industry Minister Piyush Goyal

Goyal has been the primary voice, stressing progress amid geopolitical frictions, including the US's 50% tariffs on Indian goods (25% reciprocal + 25% penalty for Russian oil imports). His comments highlight a "cordial" atmosphere and firm red lines on domestic protections.

v  November 13, 2025 (At India Global Trade Talks Event, New Delhi): "India is negotiating trade pacts with the US, EU, and other nations to lower barriers and boost the flow of goods and services." He underscored the government's commitment to equitable deals that enhance bilateral trade from $191 billion to $500 billion by 2030, without compromising local industries.

v  November 11, 2025 (Udyog Samagam 2025 Conference, New Delhi): "We are working on a fair, equitable, and balanced trade deal... India will not compromise on the interests of its farmers, dairy sector, and workers while negotiating trade agreements with other countries." Goyal noted that five rounds of talks have occurred, but the timeline remains fluid: "If that happens, it could happen any day, it could happen tomorrow, it may happen next month, it may happen next year, or it may never happen".

v  November 5, 2025 (To ANI News Agency): "Discussions on a Bilateral Trade Agreement are 'going on very well'---There are many sensitive and serious issues, so naturally, it takes some time." This came hours after White House updates on similar progress, aligning with the February 2025 Modi-Trump directive for a fall deadline.

v  Earlier in October (October 31), Goyal described talks as being in "advanced stages," particularly on tariffs and non-tariff barriers, following Trump's hints at relief.

Indian Commerce Secretary Sunil Barthwal

Barthwal, as the chief negotiator's overseer, has focused on procedural advancements and ongoing engagement across channels. His most recent public comments predate November but confirm sustained momentum.

v  August 14, 2025 (Press Briefing, New Delhi): "India continues to be 'fully engaged' with the U.S. on a Bilateral Trade Agreement... Discussions span multiple levels—diplomatic, ministerial, and industry—even as new US tariffs add pressure amid geopolitical developments." He noted clarity on the next round (sixth) would emerge closer to August 25, with talks covering market access, SPS measures, and digital trade.

v  Prior updates include May 15 ("Talks are continuing; they are progressing very well, and a team is slated to go to the US") and April 15 ("Very good progress... India has decided to go for a path of trade liberalization with the US"), when terms of reference were inked.

Other Officials

v  Rajesh Agrawal (Additional Secretary, Department of Commerce; Chief Negotiator), April 15, 2025: "We are on schedule regarding the bilateral trade agreement (BTA) and its negotiations... Virtual discussions this month, in-person mid-May." He emphasized opportunities for businesses post-deal.

v  Satya Srinivas (Additional Secretary), June 16, 2025: On an initial deal: "Work on documentation is going on and legal scrubbing is in progress... The process will be completed within three months." He addressed US Fast Track Authority concerns, noting it's a US-internal matter.

Context and Outlook

These statements reflect alignment with US counterparts, including Trump's November 10-11 hints at tariff reductions to 15-16% following India's oil diversification (e.g., a new US LPG import deal for 2.2 million tonnes annually). Officials stress WTO compliance and protections for MSMEs, farmers, and fishermen, with no deadlines dictating outcomes. A formal announcement could come imminently, potentially injecting $50-100 billion into trade flows.

Trump’s ‘Triumph Card’ over India

Trump may also use a tariff threat on the Indian IT outsourcing service to ensure a favorable trade deal. The Indian IT service industry is vital for the Indian middle class and discretionary consumer spending. Any tariff on it will be far more serious for the economy than additional secondary tariffs of 25% for Russian oil. Thus, India has to allow the US for a favorable trade deal, ensuring free & fair access of US goods into the country with minimal tariffs.

Trump's reciprocal tariff & sales tax policy

The Trump admin is also considering India's high GST as another tariff barrier, and thus, at ~17.5% weighted average India tariffs and 15% IGST, US goods now face 32.5% total tax in India. Against this, Indian goods are facing 25% normal Federal tariffs and 7.5% average sales tax in various US states, totaling the same 32.5%. This is Trump's reciprocal tariffs policy and is applicable to almost every country/trading bloc, including the EU.

Under the base case scenario, Trump may reduce tariffs on Indian goods from 25% to 20%; in that scenario, Indian goods will face a total 27.50% tax in the US. And India will have to ensure the same total tax on US goods. Indian IGST on US goods should be around 12.5% on a weighted average basis, from the previous 15% and thus India has to impose a maximum 15% average tariffs on all US goods (from the present 17.5%), totaling the same 27.5% tax. India may also have to withdraw its concept of a higher tax on luxury/sin goods.

Another issue will be India's 18% GST on most of the services, including those from the US. Thus, the Trump admin may also want to impose similar tariffs/taxes on Indian services to promote American employment in line with Trump’s election campaign promise and overall extreme right MAGA sentiment. Thus, the coexistence of MAGA (Make America Great Again) and MIGA (Make India Great Again) may be very difficult, even if Trump and Modi prefer reconciliation rather than protracted escalations.

Also, India has to ensure its producers, especially MSMEs and farm sectors, are globally competitive rather than protected through obnoxious tariffs and other regulations. India has to modernize its agricultural sector to compete with the US or any other advanced economies. But the fact is that Indian producers are not yet ready to compete with the US or any other AE at this moment. Thus, Modi may face widespread protests from both the Vote bank and the note bank (corporate India). And as a mature politician, Modi may not risk his political future by going for a trade deal with the US with huge concessions. At the same time, Modi also has to manage Trump’s potential action to impose service tax/tariffs on Indian outsourcing to ensure political support from India’s middle class.

Conclusions

Under the best-case scenario, India may get 20-15% US tariffs against the present 25% under BTA-I (assuming 25% Russian oil tariffs are temporary); in that scenario, India has to impose 15-10% tariffs on US goods to match the total tax component after consideration of GST & state sales taxes. India has to open its economy for US agri & farm products substantially, if not fully, along with the MSME sector.  This is politically sensitive for both Trump and Modi as it involves domestic political compulsions involving vote banks for both. Trump is now under huge pressure from the US farmers lobby for his Tariff policies and subsequent boycott & diversification by China and other importers. Trump now has to pay almost $30 billion in subsidies to US farmers for his bellicose policies. Thus, Trump is now pressuring India to open its economy for US agri & farm products.

On the other side, Modi is also under pressure not only for domestic politics, but also for economics. Indian exports to the US have been substantially down since September'25, and almost half a million jobs are at stake in various states. Although India is now trying to diversify its exports to various other countries and trading blocs, it will take a longer time. India should have actively started the export diversification process long ago, in 2015, rather than waiting for Trump 2.0 in 2025.

Overall, India is now trying to engage with the US in marathon trade talks without any binding BTA, and buying time. India may be trying to buy time for any definitive BTA and subsequent implementation of the same. Even if India signs any BTA with the US by December'25, the actual implementation of the same may be on hold till at least November'26 or even December'27 to test Trump's political future in the US midterm election and also to prepare domestic producers for the inevitable competition from US & global imports, both in terms of quality & affordability.

Although cheaper imports are good for the overall Indian economy for a lower cost of living, it may not be good for the Indian producers, least for the initial years; governments have to provide substantial monetary & fiscal stimulus along with proper process reform to provide a level playing ground for the Indian producers, so that they can compete with their US & global counterparts. Thus, PM Modi has to navigate carefully for the sake of both vote & note bank. India has to de-risk itself from US hegemony & unilateralism by ensuring proper inclusive development in the country, so that people do not try to leave the country for the US, Europe, and other foreign destinations at the first available opportunity. Modi's 'Viswaguru' image now at stake: If India indeed develops so much, then why are people leaving the country rather than staying back?

Market Wrap

The Indian equity markets closed the week on a buoyant note, extending their winning streak amid strong Q2 earnings, the NDA's decisive victory in the Bihar elections (boosting policy continuity sentiment), and optimism around the impending US-India trade deal, including tariff relief on key exports. On November 17, benchmark indices rose for the sixth consecutive session, with broad-based buying in financials, autos, and mid-caps driving gains. The Nifty 50 reclaimed the psychologically key 26,000 level, while the Sensex notched up its longest weekly winning run since early October. Broader markets outperformed, with mid- and small-caps gaining 0.73% and 0.52%, respectively. Overall, the Nifty and Sensex advanced ~1.6–1.9% for the week, reflecting resilient domestic sentiment despite cautious global cues from US tech unwinding and Fed rate path uncertainties.

Bottom Line:

Considering the overall US approach on India's tariff & non-tariff barriers and India's stance to safeguard both Note & Vote bank, the US may impose 20% tariffs on India, totaling 27.5% tax (20% tariffs+7.5% sales tax). And India may impose 15% tariffs on US goods, totaling 27.5% tax (15% tariffs + 12.5% IGST). To get 15% tariffs from the US, India has to impose 10% tariffs on US goods, which may adversely impact Indian producers (both big corporates and MSMEs).

Technical outlook: Nifty Future and Bank Nifty Future

Looking ahead, whatever may be the narrative, technically Nifty Future (CMP: 26050) now has to sustain over 26150 for a further rally towards 26250/26350-26400/26500* and further 26650/26800-27000/27500* in the coming days; otherwise, sustaining below 26450, Nifty Future may slip to 26250/26000-25375*/24750 and 24400/24000*-23500/23100 in the coming days.

Technically, Bank Nifty Future (59027) now has to sustain over 59100 for a further rally to 59500*/60000-60500/61000 and a a further 61500/62000-63000/65750 in the coming days; otherwise, sustaining below 59000, BNF may fall to 58400/58000-57700/57100 and 56500/56100-55600/55000 and further 54500-54000 in the coming days.