Indian textile and gems & jewellery stocks experienced significant gains on Tuesday following the announcement of a new US trade deal that slashed tariffs on Indian goods to 18%. According to reports from The Economic Times, shares of export-heavy textile companies including KPR Mill, Gokaldas Exports, Trident, and Welspun Living surged up to 20% in the trading session. The deal was announced by US President Donald Trump following a call with Prime Minister Narendra Modi, with Trump noting that India had agreed to halt Russian oil purchases and reduce trade barriers on US exports. As per NDTV Profit, the textile and apparel industry has emerged as the biggest beneficiary of the US-India trade deal, with several stocks hitting upper circuits. The latest surge reflects the market's relief at this tariff reduction, which removes a major concern for exporters heavily reliant on the US market.
The gems & jewellery sector witnessed strong gains following the India-US trade deal announcement, with companies benefiting from their substantial US export exposure. According to latest market reports, Goldiam International surged 20%, hitting the upper circuit at ₹357.70 per share, while Rajesh Exports saw shares rise 5%, reaching the upper circuit limit. Tribhovandas Bhimji Zaveri jumped 10%, Titan gained nearly 5%, and Kalyan Jewellers India rallied around 8%. International Gemmological Institute (India) shares climbed 10%, hitting the upper circuit at ₹339.15, and Thangamayil Jewellery gained 6% before paring some gains. These gains reflect the strong export exposure these companies have to the US market, making them immediate beneficiaries of the tariff reduction.
Despite significant stock price declines from record highs, retail investors continued to show confidence in textile stocks throughout the tariff uncertainty period. According to CNBC TV18, most textile stocks witnessed an increase in retail shareholding between March 2025 and December 2025, with retail investors maintaining their faith even as stocks fell from record levels. Gokaldas Exports saw retail shareholding increase from 10.77% to 11.88%, while Welspun Living rose from 8.08% to 8.61% and Indo Count Industries increased from 11.49% to 11.93% during this period. Similarly, domestic mutual funds also increased their exposure to these textile stocks, with Gokaldas Exports seeing mutual fund shareholding double from 10.77% to 11.88% during the same period.
The textile sector received additional support from the Union Budget 2026, with Finance Minister Nirmala Sitharaman announcing significant policy measures to boost the industry. According to Apparel Resources, the government proposed setting up mega textile parks aimed at boosting value addition in technical textiles. The Budget outlined plans for an integrated textile programme with five sub-components, consolidating existing schemes to improve efficiency and coordination. These measures had lifted sentiment across the sector on Monday, with Kitex Garments leading the rally, rising more than 6%, while Pearl Global gained nearly 6% and Arvind advanced close to 5%. The proposed establishment of new Mega Textile Parks will attract investments, improve compliance and traceability, and create integrated hubs for scale, quality control and exports, supporting growth in technical textiles.
For Indian markets, the combination of the India-US trade deal and Budget announcements has removed key overhangs that had kept foreign investors cautious and pushed equities into a phase of prolonged underperformance. As reported by The Economic Times, Indian markets struggled through January, with the Nifty shedding over 1,000 points at its worst, while foreign portfolio investors sold billions of dollars worth of equities. The persistent trade uncertainty, weakening rupee and global risk-off sentiment had made Indian equities among the weaker performers across major markets. Analysts had consistently maintained that any breakthrough on the India-US trade front could act as a trigger for a market turnaround. According to NDTV Profit, the announcement assumes significance as several labour-intensive sectors like textiles, gems & jewellery, apparel, leather and marine were facing challenges to export goods to the US due to the 50% tariffs. The India-US trade deal is expected to boost India's labour-intensive and export-oriented sectors, especially those with high US exposure, by strengthening Indian export competitiveness and providing Indian exporters the advantage of lower trade barriers compared to several Asian competitors.
