A possible trade deal between the United States and India could help lift investor sentiment and draw foreign portfolio investors (FPIs) back into Indian markets, according to Arvind Sanger, Managing Partner at Geosphere Capital Management. He said easing tensions between the two countries could remove a key overhang that has kept some investors cautious.

“If there is some lessening of purchases by India, and that satisfies President Trump to be able to declare victory and sign off on a deal, I think the deal is probably more in President Trump’s court than in India’s,” Sanger told CNBC-TV18. He said such a move would “take India off the hot seat” and create room for fresh foreign inflows.

Among sectoral bets, Sanger sees promising opportunities in India's auto ancillary sector, which be

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