The Indian textile and apparel industry is celebrating following the announcement of a historic trade deal between the US and India, with several stocks surging to their upper circuits on February 3, 2026. The agreement, which involves the United States cutting tariffs on Indian goods from 25% to 18%, is expected to significantly lower landed costs for Indian exporters, boosting market access and enhancing pricing power.

Among the top gainers are Indo Count Industries and Kitex Garments, both of which experienced significant rallies. Other companies that hit their upper circuits include Gokaldas Exports, Pearl Global, Himatsingka Seide, SP Apparels and KPR Mill, all jumping by 20%. Trident also gained nearly 20%, while Vardhman Textiles rose 18.06% in strong trade.

This positive market reaction stems from the expectation that lower duties will widen margins and support increased order flows from major American buyers. Analysts predict that the textile sector will be among the biggest beneficiaries, given that over half of India's textile and apparel imports rely on US cotton. Bank of America (BofA) noted that the effective tariffs would drop from approximately 35% to just 12-13%, providing a lifeline for labor-intensive sectors such as textiles.

Finance Minister Nirmala Sitharaman has hailed the trade deal as a major boost for the 'Made in India' initiative. Prime Minister Narendra Modi echoed this sentiment, stating that the collaboration between the two largest democracies would benefit their people and unlock mutually beneficial opportunities.

The trade deal extends beyond textiles, with India committing to reduce dependence on Russian oil and increase imports from the US by $500 billion. This shift in energy sourcing is viewed as a pragmatic move by India to regain export competitiveness and remove a major overhang on growth.

Citi analysts anticipate that the positive sentiment surrounding the trade deal could trigger immediate foreign capital inflows, potentially improving India's Balance of Payments (BoP) position. They also suggest that a surging stock market could lead to increased investor confidence and discretionary spending, boosting urban consumption.

While the trade deal is broadly positive, some sectors may face short-term challenges. Refineries, for instance, may experience margin pressure as they transition from cheaper Russian crude to US and Venezuelan oil.

Overall, the US-India trade deal is expected to have a far-reaching impact on the Indian economy, with the textile industry poised to be a significant beneficiary. The reduction in tariffs, coupled with increased market access and enhanced competitiveness, is expected to drive growth and create new opportunities for Indian exporters.