Indian stock markets opened sharply lower on Thursday following the announcement of a 25 per cent tariff on Indian goods by US President Donald Trump, alongside penalties on Russian crude and defence-related purchases. The move triggered a wave of selling and investor concern over a potential slowdown in exports and broader business sentiment.
At market opening, the benchmark NIFTY 50 index fell 212.80 points or 0.86 per cent to 24,642.25, while the BSE Sensex plunged 786.36 points or 0.97 per cent to 80,695.50. Broader market indices also declined, with the Nifty Midcap 100 and Nifty Smallcap 100 each dropping over 1 per cent.
Market experts, however, expect the impact to be temporary. Ajay Bagga, a banking and markets expert, told ANI that while the punitive tariffs may rattle sentiment in the short term, India must take swift action to support domestic demand and shield its exporters.
“India exports around USD 87 billion worth of goods to the US and imports about USD 45 billion. The sectors most at risk include electronics, smartphones, textiles, gems and jewellery, leather goods, engineering items, seafood, and chemicals,” Bagga explained. He added that while the 25 per cent tariff appears aggressive, it may eventually settle closer to 15 per cent, similar to prior US negotiations with the EU, Japan, and South Korea.
Bagga emphasized India’s unique challenges, particularly its reluctance to open its agricultural and dairy sectors to genetically modified US exports. He urged economic reforms including deregulation, GST cuts, and stimulus measures to counteract potential shocks and reinvigorate domestic growth.
The tariffs also raise the specter of rising oil prices, given new curbs on Russian crude. With around 18 per cent of Indian exports now facing higher US duties, concerns are growing over the Balance of Trade and Current Account Deficit.
Sector-wise, Nifty Oil & Gas saw the sharpest decline, falling 1.48 per cent, followed by Consumer Durables at 1.42 per cent. Auto and Pharma indices also slipped over 1 per cent, with all key sectors trading in the red.
Vikram Kasat, Head of Advisory at PL Capital, noted that the Nifty’s recent low of 24,598 is a crucial support level. “A break below could push the index toward 24,450–24,500,” he warned, though he added the IT sector might gain indirectly due to rupee depreciation.
On the geopolitical front, Kasat remarked that India-US relations are at their most strained since the mid-1990s, stating, “President Trump’s aggressive trade posture has undermined years of carefully built bipartisan trust.”
Meanwhile, several major companies, including Hindustan Unilever, Maruti Suzuki, Sun Pharma, and Adani Enterprises, are set to announce their Q1 earnings today—potentially offering further direction to the markets.
Asian markets traded mixed on Thursday. Japan’s Nikkei 225 rose 0.7 per cent, while Singapore’s Straits Times fell 0.66 per cent. Hong Kong’s Hang Seng declined 1.38 per cent, South Korea’s KOSPI dipped 0.39 per cent, and Taiwan’s Weighted Index edged up 0.34 per cent.
