Relations between the U.S and India are warming.
Walmart should benefit from lower tariff-related costs.
Shares of Walmart (NASDAQ: WMT) rose on Monday after the U.S. and India struck a major trade agreement.
By the close of trading, Walmart's stock price was up more than 4%.
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The U.S. and India agreed to reduce tariffs on each other's exports. Prime Minister Narendra Modi also said his country would buy more American-made products, according to an announcement by U.S. President Donald Trump.
U.S. retailers with considerable exposure to India's economy, whether through its rapidly expanding manufacturing base or fast-growing consumer markets, rose sharply on the news.
Walmart has a significant presence in India. The discount retail titan has shifted more of its supply chain operations to India in recent years as it strives to reduce its dependence on China. In June, former Walmart CEO Doug McMillon said the retail giant set a goal to source $10 billion worth of goods from the country by 2027.
Walmart is also set to benefit from India's economic expansion through its roughly 80% equity stake in Flipkart. Walmart originally invested about $16 billion in the Indian e-commerce leader back in 2018 and has since increased its ownership position on several occasions.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.