Article
Feb 4, 2026
India’s U.S. & EU Trade Deals: What Investors Should Know (2026)
India has just secured two critical trade agreements,
one with the United States and another with the European Union that meaningfully improve its global export competitiveness.
For investors, this isn’t just a diplomatic win. It has direct implications for earnings, sector leadership, and long-term capital flows into India.
As trusted advisors, we look beyond headlines to understand where sustainable wealth creation may emerge especially for NRIs investing in India with a long-term lens.
Key Developments at a Glance
U.S - India Trade Deal
U.S. tariffs on Indian exports cut to 18% (from ~25–50%)
India gains a relative tariff advantage over peers:
Pakistan: 19%
Vietnam & Bangladesh: 20%
The U.S. expects $500 billion of imports from India over time, including energy, technology, and farm products
India - EU Free Trade Agreement
Dubbed the “mother of all deals”
Substantially lowers or eliminates tariffs across goods and services
Improves regulatory alignment and market access for Indian exporters
Sectors Likely to Benefit the Most
1. Manufacturing & Labor-Intensive Exports
Industries such as:
Textiles & apparel
Leather & footwear
Jewelry
Toys & furniture
stand to regain competitiveness lost to regional rivals over the past decade.
Why this matters:
These sectors are export-driven and employment-heavy, with many small and mid-sized companies positioned to see margin and volume expansion as tariffs fall.
2. Pharmaceuticals & Life Sciences
Fitch Ratings’ BMI highlights pharma as a key beneficiary of the EU deal:
~11% tariffs eliminated on EU drug imports
Covers high-value segments:
Cancer therapies
Biologics
GLP-1 drugs
EU pharma imports from India were $1.2 billion in 2024
Long-term growth outlook:
Market size expected to grow from $31.2 billion (2025) to $45.7 billion (2035)
10-year CAGR: ~5.2% in local currency
Lower costs, faster approvals, and simpler compliance could reverse recent export stagnation and restore India’s growth trajectory in global pharma markets.
3. IT & Technology Services
Improved access to U.S. and EU clients
Increased demand for:
Digital transformation
Regulatory & compliance technology
Manufacturing and pharma-linked IT services
This reinforces India’s role as a core global technology and services partner.
Market Impact: More Than a Short-Term Rally?
India’s equity markets had faced headwinds from tariff uncertainty, which weighed on sentiment and earnings expectations.
With these agreements:
A key policy overhang is removed
Global investors are reassessing India’s medium- to long-term growth outlook
India-focused investment vehicles overseas have already reacted positively
What This Means for NRI Investors
For NRIs, these trade deals present structural opportunities, not tactical trades.
Actionable Insights for NRIs
Prioritize Export-Linked Themes
Manufacturing exporters
Pharma companies with U.S. and EU exposure
Ancillary supply-chain businesses
Look Beyond Large Caps
Mid-cap and select SME players may benefit most from tariff advantages
These are often underrepresented in generic NRI portfolios
Invest with a 5–10 Year Horizon
Trade agreements typically translate into gradual but durable earnings growth
Best suited for long-term capital aligned with India’s global integration story
Structure Matters
Returns depend not just on stock selection, but also on:
Correct NRI investment routes
Tax efficiency
Smooth repatriation planning
How Pivot Money Helps NRIs Navigate This Opportunity
At Pivot Money, we help NRIs translate policy shifts into well-structured, long-term wealth strategies.
Our Role:
Identify sector and theme-level opportunities arising from global trade realignments
Build India-focused portfolios tailored for NRIs
Ensure investments are tax-efficient, compliant, and repatriation-ready
Continuously monitor policy, currency, and global macro risks, so your wealth stays protected, not reactive
Trade deals create opportunity. Disciplined planning determines who benefits from them.
For NRIs looking to participate in India’s next phase of global growth with confidence and structure, Pivot Money serves as a trusted partner, helping you invest with clarity, control, and long-term perspective.