After the India-US trade deal on Sunday, textile stocks jumped sharply on February 3. Shares of companies like Kitex Garments, KPR Mill, and others rose nearly 20 per cent. The rally came as investors see textiles as one of the biggest winners of the trade deal, which was announced by both Prime Minister Narendra Modi and US President Donald Trump.
India and the US have agreed on a new trade pact. Under the deal, reciprocal tariffs on Indian goods have been cut to 18 per cent from 25 per cent. The extra 25 per cent duty linked to purchases of Russian crude has also been removed, with immediate effect.
Other labour-intensive sectors also to gain
The gains are not limited to textiles. Labour-heavy sectors such as gems and jewellery, and engineering goods, are also expected to benefit the most, Equity Pandit reported.
Exports had taken a hit earlier due to higher tariffs. Surveys cited in reports show that shipments to the US fell by over 50 per cent quarter-on-quarter for nearly one-fourth of exporters.
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In early trade, textile stocks surged. At 11:29 AM, Kitex Garments hit the 20 per cent upper circuit at Rs. 196.48. KPR Mill was up 17.48 per cent, trading at Rs. 1,009.15 on the NSE.
Textile shares soar
Stocks across the textile space saw sharp gains. Shares of Gokaldas Exports, KPR Mill, Welspun Living, Trident, SP Apparel, and Indo Count Industries hit the 20 per cent upper circuit. Several other stocks were also up, rising between 15 per cent and 20 per cent, as per CNBC TV18.
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Analysts say India's share in US ready-made garment imports has been relatively low. Bangladesh holds about 9 per cent of the market, while Vietnam has a much bigger 19 per cent share. India's share stands at just 6 per cent, but this could now rise with tariffs coming down, according to CNBC TV18.
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