Retail stocks with meaningful exposure to Indian manufacturing are trading higher Monday after the White House said it would cut its reciprocal tariff on Indian imports to 18% from 25% following a call between Prime Minister Narendra Modi and President Donald Trump.
“Out of friendship and respect for Prime Minister Modi, and per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%. They will likewise move forward to reduce their tariff and non-tariff barriers against the United States to ZERO,” President Trump posted on Truth Social.
As part of the agreement between the two countries, India committed to buying more American-made goods, Venezuelan oil, and to cease purchases of Russian oil, the latter of which is anticipated to help end the war in Ukraine.
The news reverberated through the consumer sector, driving up shares of Walmart (WMT), Target (TGT), Williams Sonoma (WSM), Wayfair (W), Amazon (AMZN), Gap (GPS), and Kohl’s (KSS), all of which have shifted a majority of manufacturing to India to mitigate the impact from import tariffs on Chinese manufactured merchandise.