New Delhi, Dec. 19 -- The Indian stock market has significantly lagged Asian peers in the last six months, hurt by the steep 50% tariffs on the US by India and deadlock in the trade deal between Washington and New Delhi.

A latest report by ICICI Direct said the performance gap underscores that trade policy clarity, not domestic growth alone, has been the dominant driver of regional equity returns. Against this backdrop, it believes that trade resolution is the missing catalyst.

The US-India deal could unlock India's relative re-rating versus Asian peers, and is crucial for its re-rating to 29,200 in the next calendar year, the brokerage said in its Quant Yearly Outlook report for 2026.

It added that FPI outflows could reverse as US qua...