The US has announced reducing the reciprocal tariff on Indian goods to 18% from 50%. Axis Direct calls the move “structurally positive for India’s medium-term growth and external stability.” They believe that this reduction is expected to boost exports, support manufacturing investment, and strengthen foreign direct investment inflows, while also helping narrow the current account deficit and stabilise the rupee.
The brokerage notes that India–US trade relations are entering a more cooperative phase after a period of tariff disputes, regulatory frictions, and supply-chain realignments. Axis Direct adds that the deal aligns with India’s manufacturing push and export diversification strategy, while providing the US with a large, reliable market and a strategic alternative for critical manufacturing sectors.
Pharmaceuticals and Healthcare
Axis Direct identifies Indian pharmaceutical companies as clear beneficiaries of the tariff reduction. The report states, “The reduction in reciprocal tax from 25% to 18% is incrementally positive for Indian pharmaceutical companies with meaningful exposure to the US market, which contributes ~30–40% of sector revenues. The 700 bps cut lowers landed-cost pressure on exports and improves price competitiveness in the structurally price-erosive US generics market.”
The brokerage notes that, assuming a 35% US revenue mix, the tariff reduction could improve consolidated EBITDA margins by 100–200 basis points, translating to “an overall 8–10% EPS upside for US-focused generic players.” Companies highlighted include Dr Reddy’s, Lupin, Aurobindo Pharma, Sun Pharmaceutical, Cipla, Zydus Lifesciences and Divi’s Labs. Axis Direct adds that CDMO and API players may benefit indirectly, although the impact is expected to be moderate.
Chemicals, Textiles, and Midcap Manufacturers
Axis Direct sees positive outcomes for chemical and textile exporters. The report explains, “Most companies have been ‘absorbing’ a portion of the 50% tariff to stay competitive. Halving the tariff allows them to drop their prices slightly to gain volume while still keeping a larger slice of the profit.”
Export volumes are expected to recover by 20–25%, enhancing factory utilisation and spreading fixed costs over more units. Axis Direct also points out that Indian companies may gain a “massive structural advantage in the North American supply chain” if US tariffs on China remain high.
Companies expected to benefit include Aarti Industries, Vinati Organics, Welspun Living, Gokaldas Exports, KPR Mill, Pearl Global, Arvind, Vardhman Textiles, Kitex Garments, Indo Count Industries, Praj Industries, Pitti Engineering, and Kirloskar Brothers, as per the report.
Automobiles and Auto Components
For the automobile sector, Axis Direct notes that the reduction in US tariffs is “a meaningful tailwind for Indian automobile exporters, particularly auto component manufacturers, for whom the US remains a key end market contributing 25–30% of export revenues.” The report explains that the tariff rollback could lower US import costs by 6–8%, supporting incremental volume gains, better customer retention, and higher plant utilisation. The benefit is skewed toward auto ancillary companies rather than vehicle manufacturers.
Companies highlighted in the report included Steel Strips Wheels, Sansera Engineering, Tata Motors, Bharat Forge, and Sona BLW.
Information Technology and Digital Services
Axis Direct emphasises supportive government measures alongside the trade deal for IT companies. The report states:
“The measures announced in the Budget are positive for the Indian IT sector as they will lower regulatory friction, enhance India’s attractiveness as a global IT and cloud hub, and support sustainable margin stability, making the policy environment decisively supportive for long-term growth.”
Companies positioned to benefit as per the report included TCS, Infosys, HCL Tech, Wipro, Tech Mahindra, and Bharti Airtel (Nxtra – Data Centre Subsidiary). Tax holidays, fast-tracked APAs, and a uniform safe harbour margin are cited as key advantages.
Electronics Manufacturing Services (EMS)
Axis Direct identifies EMS companies as beneficiaries of the trade deal. The report notes:
“Electronics manufacturing services stand out as a key beneficiary. With tariff support and supply-chain realignment, India could gain share in smartphone assembly, semiconductors (OSAT), and electronics components.”
Companies in focus mentioned in the report include Dixon Technologies, Syrma SGS, and Avalon Technologies.
FMCG
The FMCG sector sees mixed effects. Axis Direct states:
“Export-oriented Indian FMCG businesses stand to gain substantially from reduced tariffs, improved market access and enhanced competitiveness in foreign markets. Lower tariffs directly improve the price competitiveness and margins of India products on foreign shelves.”
At the same time, the report cautions that domestic companies could face increased competition from imported goods, especially in mid-to-premium segments.
Companies benefiting from export orientation include Nestle India, ITC, Tata Consumer, and Dabur, while HUL and GCPL are largely domestic-focused and less affected, as per the report.
Metals and Mining
Axis Direct describes the impact on metals and mining as largely neutral. The report explains:
“Section 232 tariffs on steel and aluminium are separate and remain in force. These US national security-based tariffs apply to steel and aluminium products, which operate outside bilateral trade deals, hence no major impact on Metals and Mining companies in India.”
Indirect benefits may arise from increased demand for processed or engineered metals. Companies with some overseas presence include Welspun Corp, Jindal SAW, APL Apollo Tubes, and Maharashtra Seamless, the report added.
Conclusion
Axis Direct concludes that the India–US trade deal should be seen as a medium-term structural positive rather than a short-term trigger. The report states that sustained implementation could improve India’s export competitiveness, deepen manufacturing capabilities, and integrate Indian companies further into global supply chains. Benefits are concentrated among sectors and companies with significant US exposure, while sectors with limited export linkage are expected to see neutral or mixed effects.