Nifty Hits 25,000: India-US Trade Deals, Inflation in Focus

Stock Market India | Dalal Street was buzzing on Thursday, May 15, 2025, as the Nifty 50 index soared past the much-awaited psychological milestone of 25,000 for the first time since October 2024. This upbeat move shows investor confidence is on the rise, backed by easing inflation, strong industrial growth and positive corporate results.

India-US Trade Talks Add Fuel to Market Optimism

Adding to this positive vibe is the recent announcement from Doha, where US President Donald Trump revealed that India has proposed a trade deal offering “basically zero tariffs” on American goods. This potential agreement could mark a major breakthrough, especially with Washington’s 90-day tariff freeze on Indian exports set to expire on July 9.

Trump’s earlier comments that tariff talks with India are “going great” and the hint that a final deal could be near have only heightened market enthusiasm. A favourable trade deal with the US would not only boost bilateral commerce but also strengthen India’s position as a preferred investment destination.

What’s Happening on the Global Trade Front?

Nearly six weeks have passed since President Trump announced tough tariffs targeting several of America’s key trading partners — yet no conclusive trade deals have been finalized.

• US-China: Temporary Truce in Tariff Wars

The high-profile US-China trade negotiations ended with a 90-day tariff reduction agreement, easing the pressure temporarily. The US currently imposes a 30% tariff on Chinese imports, while China’s tariffs on American goods stand at 10%. Though this pause brings some relief, the future of the trade war remains uncertain.

• US-UK Talks: Waiting for Clarity

One ongoing discussion is the US-UK trade pact. Although early indications suggest a 10% tariff on some UK goods imported into the US, the finer details remain under wraps. Both sides have yet to fully reveal the terms, leaving businesses and investors in suspense.

How Are Markets Reacting?

Global equity indices have responded positively to the latest trade developments. The announcement of the US-UK pact and the US-China tariff freeze triggered upbeat market sentiment worldwide. Still, investors remain cautious, as the risk of stalled negotiations or renewed tariff escalations looms large.

Countries are also actively seeking ways to diversify trade risks by incentivizing domestic consumption and exploring new export markets. Yet, delayed trade deals could increase inflationary pressures and recession risks, especially for the US — and these effects would ripple through the global economy.

Why India Remains a Bright Spot for Investors

Despite global uncertainties, India’s macroeconomic fundamentals look solid.

• Inflation is easing, with Wholesale Price Index (WPI) inflation dipping to a 13-month low of 0.85% in April and retail inflation cooling to a 68-month low of 3.16%.
• The Purchasing Managers Index (PMI) and Index of Industrial Production (IIP) continue to show positive momentum.
• The recent Q4FY2025 corporate earnings season exceeded expectations, with fewer earnings downgrades forecasted for FY2026.
• These factors, combined with hopes of a good monsoon and lower interest rates, suggest that consumption and market sentiment could strengthen further in the months ahead.

The Road Ahead

The biggest wildcard right now is how the tariff wars will unfold. Any sudden changes in trade talks or policies could quickly shift investor sentiment and affect capital flows. For now, though, optimism is high, with India’s markets taking the lead.

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