Trump Tariff News: US President Donald Trump’s 25 per cent tariff on Indian goods spooked global markets in the evening, dragging down Gift Nifty and raising fears of a shaky session on D-Street ahead of F&O expiry.
Despite extended negotiations between the US and India, the tariff announcement landed late Wednesday, ahead of the August 1 deadline, catching markets off guard. Experts warn that the move could hit export-driven sectors and sentiment, at least in the near term.“Markets will react negatively to the imposition of tariff on India. Despite the unpredictable policymaking of the US, markets were expecting a tariff deal to work out as longer-term US-India strategic interests are aligned,” said Nilesh Shah, MD Kotak Mahindra AMC.
Key sectors likely to be affected
Following Trump’s announcement, Gift Nifty futures dropped sharply, sliding over 160 points to near 24,700, pointing to a weak open for Indian equities. Sectors such as textiles, engineering, and chemicals may face immediate selling pressure due to their export exposure.
Trump’s post on social media lashed out at India’s trade practices and its energy ties with Russia, further souring the tone for global investors.
Will this trigger a deeper correction?
The 25 per cent tariff, while significant, is not expected to derail India’s macro outlook entirely. Exports to the US accounted for $77.5 billion in 2024, and the estimated GDP hit from this move ranges between Rs 25,000-Rs 66,000 crore, or just 0.07-0.2 pe cent, according to analysts.
That said, the sentiment shock, especially on a monthly expiry day, could heighten volatility, with traders rushing to adjust positions in derivatives.“Markets will hope for a ‘TACO’ trade if better senses prevail,” the expert added, referring to a “Trump-Adjusts-Changes-Opinion” scenario, something markets have seen in the past.
