On Thursday, the Indian stock market faced a notable decline, with the BSE Sensex plummeting by over 500 points following former U.S. President Donald Trump’s announcement of a 26% reciprocal tariff on imports from India. The Nifty 50 index also experienced a significant drop, highlighting widespread investor concerns about the potential impact of these trade barriers.
The day started poorly for the Sensex, which continued to fall as investors reacted to Trump’s comments. Major sectors such as IT, automotive, and pharmaceuticals encountered considerable selling pressure, with leading IT firms like Infosys, TCS, and Wipro suffering losses due to their reliance on the U.S. market. On the NSE, the Nifty 50 slipped below crucial support levels, and both banking and FMCG stocks followed suit with downward trends. Analysts suggest that this decline is primarily driven by worries that increased tariffs could weaken India’s export competitiveness in the U.S. market.
Trump’s announcement indicates a possible intensification of trade tensions between the two nations. India, a key trading partner for the U.S., is one of the largest suppliers of textiles, pharmaceuticals, and IT services to America. The proposed 26% tariff could significantly affect these industries, leading to potential revenue losses and a decrease in investor confidence.
Market analysts believe that the ongoing trade disputes and uncertainties regarding tariffs may result in further market fluctuations. Investors are keenly watching how the Indian government will respond to Trump’s announcement, as any countermeasures or trade negotiations could influence market recovery in the near term. At this point, market participants are advised to proceed with caution, as geopolitical factors continue to shape market trends.
