Indian Stocks Fall Sharply After US Announces Extra 25% Tariff on Indian Goods Starting Tomorrow

Indian stocks fell sharply on Tuesday following the US Department of Homeland Security’s announcement that an additional 25% duty will be imposed on all goods imported from India starting tomorrow. The decline wiped out all gains for August.

According to Reuters, the Nifty 50 and Bombay Stock Exchange (BSE) Sensex were down 7% as of 10:39 a.m. (Pakistan time: 10:09 a.m.), trading at 24,787 and 81,028 points, respectively. Both indices had shown minimal change earlier this month, after a nearly 3% drop in July.

Out of 16 major sectors, 15 posted losses, with mid- and small-cap stocks falling by around 1%.

Indian exports are now expected to face US duties of up to 50%, among the highest levied by Washington. Earlier this month, US President Donald Trump announced additional tariffs in response to India’s increased purchase of Russian oil.

Pankaj Pandey, Head of Retail Research at ICICI Securities, said the news is negative for the market but is unlikely to trigger a major decline, as it is not an unexpected development.

Reliance Industries, the largest stock in Nifty 50, dropped about 1%. Shares of major financial institutions fell 1.1%, while pharmaceutical companies declined 1.4%. Shares of textile, chemical, and shrimp-exporting companies also dropped, as these sectors are expected to be most affected by the US duties.

Pandey added that in the coming days, market trends are likely to focus on specific sectors or companies. Export-dependent stocks may remain under pressure from the tariffs, while sectors linked to domestic consumption could perform better.

Consumer-related stocks rose by 0.3%, making it the only sector to record positive performance among the 16 major sectors. Meanwhile, telecom operator Vodafone Idea saw its shares fall 10%, after reports suggested that the government is not considering additional relief on dues.

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