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Indian benchmark indices are expected to open lower on Thursday, July 31, in reaction to the tariff announcement
Trump in a post to Truth Social on Wednesday said India had tariffs that were āamong the highest in the World’
GIFT Nifty fell sharply on Wednesday, dropping 0.70% or 174 points to 24,680, after former US President Donald Trump announced a fresh 25% tariff along with an unspecified penalty on India. The move, linked to Indiaās continued trade ties with Russia, reignited concerns over global protectionism and weighed on market sentiment.
Trump made the announcement via his Truth Social account, stating that the tariff and penalty would take effect from August 1. He accused India of maintaining high tariffs and non-monetary trade barriers, even as he described the country as a āfriend” of the United States.
āWhile India is our friend, we have done relatively little business with them because their tariffs are far too high, among the highest in the world,” Trump wrote. āThey also have the most strenuous and obnoxious non-monetary trade barriers of any country.”
The former US President claimed the new trade penalties were a response to Indiaās large-scale imports of military equipment and energy from Russia. However, he did not clarify the quantum of the penalty beyond the 25% tariff.
Equities Likely to Open Lower
Indian benchmark indices are expected to open lower on Thursday, July 31, in reaction to the tariff announcement. Export-oriented sectors such as IT, textiles, and engineering may see heightened pressure, analysts said.
On Tuesday, July 30, equity markets ended flat despite early gains. The BSE Sensex rose 144 points, or 0.18%, to close at 81,482, while the NSE Nifty50 gained 34 points, or 0.14%, to finish at 24,855. However, concerns around the delayed India-US trade deal and now fresh tariff headwinds are expected to weigh on investor sentiment going forward.
Adding to the pressure, the Indian rupee weakened to a four-month low amid fears of a slowdown in exports following the US action.
Impact on Economy Could Be Modest, Say Analysts
Bhavik Joshi, Business Head at INVasset PMS, said Trumpās tariff move has revived concerns around global protectionism just as markets were beginning to stabilize post-slowdown.
āA tariff of this magnitude poses risks, but its macroeconomic dent is likely to be contained,” Joshi noted.
Preliminary estimates suggest India could suffer a GDP loss of $3ā8 billion due to the tariffs. However, that could be offset by $10ā15 billion in potential gains from trade realignment and supply chain diversification.
āMarkets may reprice risk temporarily, but structurally, India is better positioned than most to absorb and pivot,” Joshi said. āThe focus now shifts to executionāon supply chain reconfiguration, INR trade acceleration, and bilateral trade deals. Amid the noise, Indiaās fundamentals remain the clearest signal.”
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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