Donald Trump Announces 26% ‘Discounted’ Reciprocal Tariff On India: How Could It Impact The Indian Stock Market?


Donald Trump’s Reciprocal Tariff Fear Looms, U.S. Indices Respond With Apprehension
In response to Trump’s tariff announcements, the Dow futures fell nearly 1,100 points, while the S&P 500 and the Nasdaq futures are down 3.5% and 4.5% respectively.
Asian equities are also trading with heavy losses. Japan’s Nikkei 225 index was down 3.42%, or 1,222.77 points, at 34,503.10 in early trade, while the broader Topix index was down 3.32%, or 87.93 points, at 2,562.36. Nikkei average futures were also down 6% in the minutes before opening, according to news agency Reuters.
In Australia S&P/ASX 200 index fell as much as 2.1% to 7,768 points by 0002 GMT. The benchmark recorded its biggest intraday loss since December 19, 2024.
The tariff announcement is also likely to trigger an immediate negative reaction in the Indian stock market. The GIFT Nifty, an early indicator of how Sensex and Nifty 50 will start off trade, is indicating a gap down start, currently trading 380 points lower near the mark of 23,000.
However, experts point out that reciporcal tariff may not have a significant negative impact on the economy.
Sectors like IT and automobiles are likely to face selling pressure today, but in the medium to long term, the market is likely to absorb the impact, they said.
Donald Trump Announces 26% ‘Discounted Reciprocal Tariff’ On India
Speaking from the Rose Garden, Trump announced 26 percent reciprocal tariffs on India and 34 percent duties on China. The US President, however, added that the “discounted reciprocal tariffs” was roughly “half of what they charge us”.
Speaking about India, President Trump described tariffs by New Delhi as “very very tough”. “Their Prime Minister (Narendra Modi) just left (US recently)…he is a great friend of mine, but I said to him that ‘you’re a friend of mine, but you’ve not been treating us right’. India charges us 52 per cent, so we will charge them half of that – 26 per cent,” he said.
India’s Trade Surplus With US Not Significant
According to experts, the Trump tariffs will not affect the Indian economy in the long term as the country’s exports in the most vulnerable sectors amount to only 1.1 per cent of India’s GDP. The tariff of 26 per cent on India is not excessive compared to tariffs on other countries like China, Taiwan, Sri Lanka and Bangladesh.
India had a trade surplus of $36.8 billion with the US in in FY24. Indian exports to the US stood at $77.5 billion, while American exports to India stood at $40.7 billion in FY24, according to India Brand Equity Foundation (IBEF).
They claim that the tariffs could further come down with a possible bilateral trade agreement between India and the US.