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India-US Trade Deal: Market's Next Big Catalyst?
21 Nov
Summary
- India has underperformed emerging markets by 25% this year.
- Elevated tariffs caused foreign investor discomfort and outflows.
- A favorable trade deal could resolve investor concerns and boost markets.
The prospect of an India-US trade agreement is a key focus for Indian equities, with analysts suggesting it could be the market's next major catalyst. This potential deal's impact hinges on its clarity and terms, which foreign investors have been closely awaiting.
This year, India has seen a notable underperformance compared to other emerging markets, attributed to shifting tariff expectations and the global AI trade. Lingering high tariffs have created discomfort for foreign institutional investors, leading to sustained capital outflows.
Should the trade deal provide favorable clarity and a path toward reduced trade frictions, it would address a significant concern for global investors. This development is anticipated to act as a powerful catalyst, potentially driving a positive rally in Indian markets.
