Indian markets tumble in mid-morning trade amid tariff shock

New Indian Express

3 days ago

Indian equity markets fell sharply in mid-morning trade on Wednesday, August 7, after U.S. President Donald Trump announced an additional 25% tariff on Indian exports. The move effectively doubles U.S. tariffs on Indian goods to 50%, triggering widespread concern among investors and exporters.
By 11:32 AM IST, the BSE Sensex was down 483.36 points or 0.60%, trading near 80,060. The Nifty 50 also slipped by over 153 points, falling to around 24,421 — marking a three-month intraday low for both benchmarks.
Markets opened in the red, with the Sensex initially dropping about 150 points and Nifty slipping 51 points, as the impact of the tariff announcement began to weigh on investor sentiment. Export-linked sectors including textiles, gems and jewellery, auto components, and engineering goods were among the worst hit. Shares of companies such as Gokaldas Exports, Trident, and Arvind saw declines of 0.7% to 3%.
The tariff escalation is seen as a direct response to India's continued imports of discounted Russian crude. Analysts warned that the sharp increase in duties could make Indian goods uncompetitive in the US. market, leading to a potential fall in exports and slowing GDP growth by up to 40 basis points over the next year.
Foreign portfolio investors have turned risk-averse, withdrawing nearly $900 million from Indian equities in the first week of August, following $2 billion of outflows in July.
Despite the negative turn, some optimism remains. A 21-day grace period before the new tariffs take effect on August 27 opens a window for negotiations. A US trade delegation is expected to visit India on August 24, potentially offering an opportunity to de-escalate tensions.
The Ministry of External Affairs has described the move as 'unjustified and unreasonable,' and pledged to take necessary steps to safeguard national economic interests.
Senior government officials including Amitabh Kant called the moment a 'once-in-a-generation opportunity' for India to push for deep structural reforms, while Congress MP Shashi Tharoor warned that India could lose its competitive edge to nations like Vietnam and Bangladesh if corrective steps are not taken.
As of mid-morning, broader market indices also traded lower, with small- and mid-cap indices down 0.3% to 0.4%. Pharma and electronic manufacturing stocks were among the few sectors holding ground.
With volatility expected to persist in the near term, investors are closely watching for policy responses, foreign capital flows, and developments in trade negotiations between New Delhi and Washington.