India’s trade deal with the US could help revive foreign portfolio investor inflows into domestic equities, as India clearly is a growth story, Rajiv Agarwal
of Doordarshi India Fund told ETNow. Agarwal noted that the sentiment was quite negative due to no progress in the India-US trade deal. Agarwal noted that "valuations need to be looked into to figure out where they are compelling." Notably, On February 2, 2026, Foreign Institutional Investors recorded total sales of Rs 17,005 crore in the capital market segment across BSE, NSE, and MSEI, resulting in a net outflow of Rs 1,832.46 crore. In contrast, Domestic Institutional Investors registered buy transactions amounting to Rs 18,626.43 crore on the same day, leading to a net inflow of Rs 2,446.33 crore. However, the FII selling spree did see a marginal halt two days ago in the lead up to the budget when domestic investors became the net seller, and FIIs became the net buyer for the first time in nearly 100 days on Jan 29. The momentum continued till Jan 30, when DIIs sold Rs 601.03 crore worth of Indian equities and FIIs bought Rs 2,251.37 crore worth of Indian equities.
India-US Trade Deal
US President Donald Trump agreed to a trade deal with India on Monday night IST, lowering tariffs on Indian exports from 25 per cent to 18 per cent.In a post on Truth Social, Trump wrote, "It was an honour to speak with Prime Minister Modi. He is one of my greatest friends and, a Powerful and Respected Leader of his Country. We spoke about many things, including Trade, and ending the War with Russia and Ukraine. He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week! Out of friendship and respect for Prime Minister Modi and, as 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%."
Also, US Ambassador to India, Sergio Gor tweets, "As I have said many times, President Trump genuinely considers Prime Minister Modi a great friend. Thrilled by the news of the trade deal this evening. The relationship between the United States and India has LIMITLESS POTENTIAL!"
