Chemical Stocks Surge Up to 19% on US-India Trade Deal, Brokerages Name Top Beneficiaries

Published By DPRJ Universal | Published on Tuesday, 3 February 2026

Indian chemical stocks soared by up to 19% following a new US-India trade agreement that lowered export tariffs to 18%. This deal is set to enhance margins, volumes, and competitiveness for the sector. Brokerages have identified companies like Aarti and UPL as key beneficiaries, attributing the sector's robust rally to factors such as operating leverage, the China-plus-one strategy, and a strengthening rupee, signaling a positive outlook for the industry.

The Indian chemical sector experienced a significant surge, with stock prices climbing as much as 19%, driven by a new trade agreement between the United States and India. This deal is pivotal as it has successfully reduced export tariffs for chemical products to an attractive 18%, a change expected to substantially boost the financial performance and market standing of Indian chemical manufacturers. Industry analysts and brokerages anticipate that these lower tariffs will directly translate into improved profit margins, increased export volumes, and a heightened level of global competitiveness for companies within the sector. Brokerage firms are actively highlighting specific companies that are well-positioned to capitalize on these new market dynamics, with Aarti and UPL being explicitly named among the top beneficiaries. Beyond the direct impact of tariff reductions, experts point to several underlying drivers fueling this sharp, sector-wide rally. These include the principle of operating leverage, which amplifies profitability as sales volumes grow, and the ongoing 'China-plus-one' strategy, where global businesses diversify their manufacturing and supply chains to countries like India. Additionally, the appreciation of the Indian rupee is cited as another supportive factor. Collectively, these elements are creating a highly conducive environment for the chemical industry, suggesting a period of sustained growth propelled by both favorable policy changes and robust economic trends.