Indian Stock Market Turmoil Isn’t Over: Trump’s Tariffs May Unleash Fresh Wave of Losses - Report

The Indian equities market which is faltering at present is also facing the risk of more losses after the nation was slapped with one of the highest tariff rates in Asia on its exports to the US.

What Did Trump Say?

The United States President Donald Trump said that he would impose a 25% levy on Indian goods starting Friday and threatened an additional penalty over the nation's energy purchases from Russia, which is a steeper hit than the 15% to 20% range applied on several regional peers.

India Stock Market Performance

Indian stock benchmark has lagged behind most of its global peers this year amid concerns over a slowdown in its economy and corporate earnings.

Additionally, this underperformance has deepened this month as foreign investors have accelerated their withdrawals, turning attention to cheaper or more attractive markets like Hong Kong and South Korea.

The value of the Indian stock market has deteriorated by $248 billion since reaching a record on July 2, 2025.

Further, the MSCI India Index is on track for its weakest month since February. While it has managed a gain this year, its performance is trailing behind the almost 14% jump in MSCI Asia Pacific Index and is sub-par in comparison to the 36% surge in the MSCI Korea Index, which has rallied on investor optimism surrounding bold reforms under a new president.

What Do Analysts Say?

"India is known to be a tough negotiator when it comes to trade, and this time the toughness seems to have affected an undesirable outcome," Tomo Kinoshita, global market strategist at Invesco Asset Management was cited by a Bloomberg report. "The 25% tariff should have a moderate negative impact on India’s stock market, especially for export sector stocks."

How Are Futures Performing?

On the local benchmark NSE Nifty 50 Index, futures contracts dropped 0.6% after Trump's announcement while the iShares MSCI India ETF declined 1.5%.

The situation is currently fluid, as the US president later said negotiations with India continue and whether or not a trade deal can be reached will be known by the end of this week, the report added.

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