Markets Slump as Trump Slaps 25% Tariff on India
Indian stock markets declined after U.S. President Donald Trump announced a 25% tariff on imports from India starting August 1. The new trade measure, coupled with a penalty for India’s continued energy and defense ties with Russia, has triggered investor caution across sectors.
Sensex and Nifty See Mixed Movement
On July 29, the Sensex dropped over 100 points and the Nifty slipped below the 24,700 mark. The decline was driven by stalled India–U.S. trade negotiations and continued foreign institutional outflows. On July 30, strong earnings from L&T helped stabilize the market slightly, with the Sensex rising 0.04% and the Nifty gaining 0.08%. However, overall sentiment remained fragile.
Gift Nifty Signals Weak Opening
Gift Nifty futures, which serve as a preview of the Nifty’s opening, fell by nearly 170 points, signaling likely pressure on broader indices going into the last trading day of the month. Analysts attributed the sharp drop to tariff fears and lack of clarity on a breakthrough in trade talks.
Trade Talks at a Standstill
The India–U.S. trade agreement remains stuck on key issues, particularly regarding agriculture and dairy. Trump’s move is seen as a strong message on trade imbalance, as the U.S. reported a $45.8 billion deficit with India in 2024.
Sector-Wise Impact
Key export sectors such as chemicals, pharmaceuticals, electronics, and machinery are expected to be hit hardest by the tariff. Market analysts warn that if the situation escalates, it could disrupt supply chains and lead to higher input costs for Indian manufacturers.
Outlook Remains Uncertain
Foreign institutional investors have been pulling out funds steadily, with July 29 witnessing outflows of nearly ₹6,000 crore—the highest since May. Until there’s clarity on the trade negotiations and global interest rate direction, experts expect volatility to persist in the Indian stock market.
