Mumbai, Feb 3 (IANS) Market expert Sunil Shah on Tuesday termed the India–US trade deal a major sentiment booster for the Indian economy and capital markets, saying it has laid a strong foundation for long-term growth and strengthened India’s position in global trade. Reacting to the development, Shah said the agreement has had an immediate positive impact on market sentiment, which was clearly reflected in Tuesday’s sharp rally.

“After the Budget, the market was slightly weak, but today the Sensex is up by over 2,200 points, and there is only one reason for this, the India-US trade deal,” he told IANS. Explaining its economic impact, Shah noted that earlier concerns over high tariffs were limited in scope. “There were no high tariffs on software and services, and pharma was not included in the 50 per cent category. Only sectors like garments, gems, jewellery and a few others were affected, and their volumes were not large enough to impact overall economic growth,” he said, adding that the reduction of tariffs to 18 per cent is clearly positive.

Calling the deal a strong beginning, Shah said bilateral trade agreements should be viewed in relative terms. “Relative to whom? With whom are you comparing? I will leave that aside and say this is a beginning. Just as we made a deal with the European Union, we have now opened doors with the US,” he said. He stressed that the more bilateral trade deals a country signs, the more beneficial it becomes for all stakeholders. “Trade deals are always a win-win. In the absence of engagement, challenges arise,” Shah said, pointing out that China’s extensive trade agreements with several countries are a key reason behind its large trade surplus.

Shah cautioned that the benefits may not be visible immediately in hard numbers but said the agreement has paved the way for future growth. “You may not see instant results, but this deal clearly demonstrates intent, the US is with India, the UK is with India, and the EU is with India. That itself is a powerful signal,” he added. Calling it a long-awaited development, Shah said the trade deal has significantly boosted confidence in India’s growth story and strengthened investor sentiment.