Textile, Shrimp Stocks Rally Up to 8% on Hopes of Imminent US–India Trade Deal

Export-focused textile and shrimp stocks rallied sharply on Thursday, with gains of up to 8%, as investor optimism surged around the possibility of a long-awaited India–U.S. trade agreement. The uptick came after U.S. President Donald Trump's positive comments on the sidelines of the World Economic Forum (WEF) in Davos, lifting sentiment across export-oriented equities.

Shares of several sector players rose sharply during the session. Avanti Feeds led the rally among shrimp stocks, climbing about 8% to ₹807 on the BSE, while Apex Frozen Foods and Coastal Corporation each rose roughly 5%, and Waterbase added about 3%. On the textile side, Gokaldas Exports advanced 6% to ₹596, Weslspun Living gained 8% to ₹126.50, and Pearl Global Industries traded about 3% higher at ₹1,480.

What’s Driving the Rally?

The renewed buying interest was sparked by upbeat remarks from President Trump, who suggested that Washington and New Delhi could reach a favourable trade deal, reinforcing expectations of tariff relief for Indian exporters. News of increased diplomatic involvement and positive signs from U.S. officials contributed to the optimism, though no official treaty has been signed yet.

The textile and shrimp sectors have been among the most affected by recent trade tensions and tariff shocks. High U.S. import duties, including previously reciprocal tariffs that at times exceeded 50%, weighed on export volumes and corporate earnings, pressuring stock performance. Renewed hope of a deal has, therefore, been interpreted by the market as a potential catalyst for reversing some of those sectoral headwinds.

Trade Talks Still in Focus

Investor confidence was rejuvenated by sustained signals that the India-U.S. trade talks are still underway, despite the lingering tariff overhang. Recently, the U.S. Ambassador to India, Sergio Gor, assumed the position and publicly supported the ongoing talks, saying that both nations are determined to have a trade agreement. His remarks bolstered hopes that negotiations are underway and helped maintain risk appetite in Indian equities focused on exports.

The proposed trade pact, if concluded, could help reset trade relations between Washington and New Delhi, which had cooled after the U.S. imposed steep tariffs on Indian goods in an earlier phase. Those levies included duties of up to 20%, part of which were described as penalty tariffs linked to U.S. claims regarding India’s geopolitical stance.

What Is the Key Takeaway for Investors?

The sudden reversal of the textile and shrimp stocks shows how sensitive the market is to developments in trade policy, particularly those related to tariffs and access to the U.S. export market. The prospective trade agreement would soften tariff pressure, improve the competitiveness of Indian exporters, and rationalise the revenues of companies that depend on foreign demand.

However, investors should be cautious: the rally is largely sentiment-driven and tied to diplomatic comments rather than a signed agreement. Until formal terms are announced and ratified, export-oriented sectors may remain exposed to tariff uncertainty and global demand volatility.

Source

Economic Times