The proposed agreement could reportedly see tariffs on Indian goods to the US drop to around 15-16%, from the current 50%, offering a major boost to export-oriented sectors such as garments, home textiles, and yarn.

The optimism was fueled after US President Donald Trump claimed Prime Minister Narendra Modi assured him that India would limit its purchases of Russian oil ' one of the key reasons cited by Washington for imposing higher tariffs earlier. Though India's foreign ministry denied knowledge of any such phone call, the remarks rekindled hopes of progress on a long-pending trade pact.

Media reports suggest both sides are engaged in advanced discussions, which may involve India agreeing to scale down Russian oil imports and allowing greater access for non-genetically modified (GM) American corn and soymeal.

Textile stocks surged in response, with Vardhman Textiles up 9.53%, Gokaldas Exports 7.18%, Arvind 6.90%, Welspun Living 6%, Indo Count Industries 5.30%, Trident 2.87%, Raymond Lifestyle 1.90%, and Bombay Dyeing 1.03%.

The sector had been under strain in recent months after steep US tariff hikes squeezed margins. Hopes of a trade thaw have now brightened the outlook, with analysts saying a favorable deal could restore India's competitiveness in the American market, especially as global retailers diversify their sourcing beyond Bangladesh.

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