Indian stock markets crashed in early trading on Thursday after U.S. President Donald Trump announced a 25% tariff on all Indian imports, effective August 1, 2025, alongside an unspecified penalty for India’s purchases of Russian oil and military equipment. The BSE Sensex plunged 786.36 points to 80,695.50, while the NSE Nifty dropped 212.8 points to 24,642.25, reflecting investor panic over the potential blow to India’s export-driven economy.
The U.S. move, seen as a pressure tactic to force India into trade concessions, follows successful U.S. deals with Japan, the UK, and the EU. India’s reliance on Russian oil and defense equipment has made it the first nation targeted with a penalty for such imports, escalating geopolitical tensions. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, warned of a “short-term hit” to Indian exports and GDP growth, predicting a ripple effect on the stock market. He noted ongoing trade talks might reduce the tariff but emphasized immediate economic challenges.
Major Sensex losers included Reliance Industries, Tata Motors, Mahindra & Mahindra, Bharti Airtel, Titan, and State Bank of India, while Eternal, Hindustan Unilever, ITC, and Power Grid bucked the trend with gains. Foreign Institutional Investors (FIIs) sold equities worth ₹850.04 crore on Wednesday, adding to market jitters. The GIFT Nifty fell 152 points (0.61%) to 24,702, signaling a weak opening.
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Asian markets showed mixed responses, with South Korea’s Kospi, Shanghai’s SSE Composite, and Hong Kong’s Hang Seng declining, while Japan’s Nikkei 225 rose. U.S. markets closed mostly lower on Wednesday, and Brent crude slipped 0.19% to $73.10 a barrel.
Analysts predict volatility in export-heavy sectors like textiles, pharmaceuticals, auto components, and shrimp, with companies like Gokaldas Exports and Avanti Feed already trading in the red. Nilesh Shah of Kotak Mahindra AMC noted markets expected a U.S.-India trade deal, making the tariff hike a shock that could dampen India’s $87 billion export market to the U.S. India’s government responded cautiously, emphasizing the protection of farmers, entrepreneurs, and MSMEs while pledging to secure national interests.
As India navigates this trade storm, experts urge structural reforms to boost competitiveness and cushion the economy against global shocks, with all eyes on upcoming trade negotiations.
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