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Time of India
5 days ago
- Business
- Time of India
Trump's tariff shocker: How India's commodities and currency reacted
In a dramatic escalation of trade tensions, U.S. President Donald Trump imposed a 25% tariff on all Indian imports effective August 1, 2025, followed by an additional 25% tariff on August 6. The move, part of a broader geopolitical strategy targeting India's continued trade with Russia, has had immediate and far-reaching consequences across India's financial and commodity markets. Bullion: Gold and Silver Soar to New Heights Productivity Tool Zero to Hero in Microsoft Excel: Complete Excel guide By Metla Sudha Sekhar View Program Finance Introduction to Technical Analysis & Candlestick Theory By Dinesh Nagpal View Program Finance Financial Literacy i e Lets Crack the Billionaire Code By CA Rahul Gupta View Program Digital Marketing Digital Marketing Masterclass by Neil Patel By Neil Patel View Program Finance Technical Analysis Demystified- A Complete Guide to Trading By Kunal Patel View Program Productivity Tool Excel Essentials to Expert: Your Complete Guide By Study at home View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Fastest Selling Plots of Mysore from 40L | 40+ Amenities PurpleBrick Learn More Undo The most striking reaction came from the bullion market . On 8th August, Indian gold prices surged to a new lifetime high, driven by global uncertainty, a weakening rupee, and fears of inflationary pressures stemming from the tariffs. Silver prices also rallied, hovering near recent highs. The tariffs may directly impact India's gems and jewellery industry, as it is one of the largest exported items from India to the US. With U.S. buyers facing higher costs, demand for Indian gold jewellery may decline abroad, but domestic investors have turned to gold as a safe haven. The surge in prices reflects both speculative buying and a hedge against currency depreciation. Live Events Energy Commodities: Crude Oil and Natural Gas Decline In contrast, crude oil and natural gas prices in India fell sharply following the tariff announcements. This counterintuitive move was largely driven by fears of reduced global demand and potential oversupply, as India—one of the world's largest oil importers—faces trade penalties for continuing to buy discounted Russian oil. The U.S. tariffs, viewed as a penalty for India's energy ties with Russia, have created uncertainty in global energy flows. Traders anticipate that India may diversify its oil sources, potentially reducing spot market demand. Additionally, the broader risk-off sentiment in global markets has weighed on energy prices, with natural gas futures also declining amid expectations of slower industrial activity. Base Metals: Volatility Takes Center Stage Base metals such as copper, aluminium, zinc, and lead have experienced heightened volatility. These metals are critical to India's engineering and manufacturing exports, many of which are now subject to the 25% tariff. Copper and aluminium, in particular, saw sharp intraday swings as traders weighed the impact of reduced export competitiveness against potential increase in domestic demand. With U.S. buyers likely to shift sourcing to other countries, Indian exporters face shrinking order books. However, some domestic manufacturers may benefit from reduced export competition, creating a complex and volatile pricing environment. Currency Markets: Rupee Nears Record Lows The Indian rupee has not been spared. It is trading near Rs 88 against the dollar, near its record weak levels. The depreciation reflects investor concerns over India's trade balance, potential capital outflows, and the broader economic impact of the tariffs. A weaker rupee makes imports more expensive, adding to inflationary pressures, but it also makes Indian exports more competitive globally—though this advantage is largely offset by the tariffs themselves. Broader Implications and Outlook The tariffs have triggered a chain reaction across India's economy. But India's response has been measured. Rather than retaliate with counter-tariffs, the government is focusing on trade negotiations and structural reforms. Meanwhile, the government is exploring trade diversification strategies, including boosting exports to Europe, Africa, and Southeast Asia. In the short term, volatility is likely to persist across commodities and currency markets. But in the long run, this episode may accelerate India's push for self-reliance, trade diversification, and deeper integration into global supply chains. (The author is Head of Commodity Research, Geojit Investments Limited)
Time of India
7 days ago
- Business
- Time of India
India contributes more to global growth than US, says RBI governor in response to Trump's 'dead economy' remarks
Reserve Bank of India (RBI) Governor Sanjay Malhotra has pushed back against US President Donald Trump's criticism of the Indian economy, stating that India is contributing significantly to global growth and remains on a strong growth trajectory. 'We have a very robust growth rate of 6.5%. As per the IMF, it is 6.4%, while the world is growing at 3%,' Malhotra said when asked to respond to Trump's remarks. Productivity Tool Zero to Hero in Microsoft Excel: Complete Excel guide By Metla Sudha Sekhar View Program Finance Introduction to Technical Analysis & Candlestick Theory By Dinesh Nagpal View Program Finance Financial Literacy i e Lets Crack the Billionaire Code By CA Rahul Gupta View Program Digital Marketing Digital Marketing Masterclass by Neil Patel By Neil Patel View Program Finance Technical Analysis Demystified- A Complete Guide to Trading By Kunal Patel View Program Productivity Tool Excel Essentials to Expert: Your Complete Guide By Study at home View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like New Container Houses Indonesia (Prices May Surprise You) Container House | Search ads Search Now Undo 'We are contributing about 18% to global GDP growth, which is more than the US, where the contribution is expected to be much lower at 11%. So, we are doing very well and will continue to further improve.' Trump, in a post on his social media platform Truth Social, called India a "dead economy" and criticised the country's trade policies. 'I don't care what India does with Russia,' he wrote. 'They can take their dead economies down together, for all I care. We have done very little business with India. Their tariffs are too high, among the highest in the world,' he added. Malhotra also said that India continues to aspire to grow higher. Live Events 'Our aspirational growth is more than 6.5%. In the past, we have achieved an average of 7.8%, so we should continue to aim for higher growth rates,' he said. The RBI has retained its growth forecast for India at 6.5% for the current financial year.
