India-US trade deal and rupee boost: Manishi Raychaudhuri breaks down market impact and FII flows

India-US trade deal: The Indian financial markets has opened on a strongly positive note today following the announcement of a significant bilateral trade agreement between India and the United States, which slashes US tariffs on Indian goods from as high as 25 per cent to 18 per cent. On Monday the deal was confirmed by US President Donald Trump and PM Modi. Veteran investor Manishi Raychaudhuri shares his take on the India-US trade deal and its market impact. From rupee appreciation and FII flows to export-orientated sectors like textiles, leather, and auto components, he explains which segments stand to benefit. Plus, he breaks down the macro factors – earnings, currency, and interest rates – shaping investor sentiment and India's long-term market outlook.He calls the decision "undoubtedly good news"."The rupee is appreciating — somewhere between 1 to 1.5 per cent — and we could see the trade deficit moderate from the recent high of around USD 42 billion in October," Manishi noted."This addresses major concerns around the balance of payments and should help stabilise the currency."Manish explained that the FII sell-off over the past 12-16 months was primarily due to two key factors – a weak earnings outlook for Indian companies and concerns about the weakening rupee. Given the potential for the trade deal to ease pressure on the currency and boost employment in export-dependent industries, he expects a resurgence in foreign investment."We still need to see earnings estimates revive for a more sustainable turnaround," he added.From an investor perspective, Manishi pointed to immediate opportunities in sectors hardest hit by the previous US tariffs of up to 50 per cent.This includes:TextilesLeather goodsSmall engineering and auto componentsAquaculture and aquatic productsJewelry"There is still room for at least two or three more rate cuts from the RBI," he added. "But the third building block — earnings estimates — is still pending. Despite the massive consumption stimulus in 2025, we are yet to see meaningful impact in consumer discretionary and other sectors." https://youtu.be/PMwr6lHvYc4?si=dqrGtwVBVAJk2BiV