The Indian stock market is poised for a rally on Tuesday, February 3, 2026, following news of a breakthrough in trade negotiations between India and the United States. The GIFT Nifty, a key indicator of market sentiment, surged nearly 600 points in reaction to the announcement, signaling a strong opening for domestic indices.
The catalyst for this surge is a newly agreed trade deal between India and the US. According to reports, US President Donald Trump revealed on his social media platform that he had spoken with Prime Minister Modi and that the new agreement involves a reduction in US tariffs on Indian goods to 18%. Previously, these tariffs stood at 25%. In turn, India will move toward zero tariffs and fewer barriers on US products and plans to purchase over $500 billion worth of US energy, tech, and agricultural goods.
The announcement has been met with optimism by market analysts. A favorable resolution to the India-US trade deal could remove an overhang for the market. The markets have been consolidating within a tight range for over a year despite India's strong macros. Some believe that this deal could trigger the return of Foreign Institutional Investors (FII) to the Indian market. FIIs have remained on the sidelines, becoming net sellers of stocks this year.
The GIFT Nifty serves as a vital pre-market indicator for the Nifty 50, offering insights into potential market openings. Its overnight trading activity allows traders and institutions to strategize based on early market sentiment. The transition from the Singapore Exchange (SGX) to GIFT City has further solidified India's position in the global financial landscape. This move brought the offshore Nifty derivatives ecosystem under Indian regulation, attracting international investors and boosting daily trade volumes.
The India-US trade deal arrives at a crucial juncture, days after India's announcement of a significant trade agreement with the European Union. While the India-EU FTA is expected to have a positive impact, market participants recognize that it is not a substitute for a comprehensive agreement with the United States. The US remains India's largest single-country export market and its biggest bilateral trade surplus partner. India is aiming to more than double the overall trade to around $500 billion each with both the E.U. and the U.S. by 2030.
Brokers such as Zerodha, ICICI Direct and Kotak Securities offer access to Gift Nifty futures through IFSC-enabled accounts.
Factors that influence the GIFT Nifty price include global market movements, economic data releases, currency exchange rates, interest rates, RBI policies, and the activity of FIIs and Domestic Institutional Investors (DIIs).