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India Today
4 days ago
- Business
- India Today
From seafood to auto: How will Trump's 50% tariff impact different sectors
US President Donald Trump's latest move to double tariffs on Indian exports to 50% has sparked concern across key export sectors. The tariff hike, set to take effect from August 27, follows a warning issued by Trump earlier over India's continued oil imports from move will hit key Indian export sectors, including seafood, textiles, gems and jewellery, and auto parts. The tariffs come as retaliation for India's oil purchases from new duties put Indian exporters at a major disadvantage compared to competitors from Bangladesh, Vietnam and other countries that face lower US tariffs. Several industry leaders have called the move "doomsday" for their businesses, with many now looking to shift manufacturing to other EXPECTED BUT STILL TROUBLINGSantosh Meena, Head of Research at Swastika Investmart, said the tariff increase was not unexpected.'The Trump administration has announced an additional 25% tariff on Indian exports, effective from 27th August. However, this move was largely anticipated by the markets, as President Trump had earlier hinted at such a development,' he added that there is still a window for discussions before the tariffs are implemented. 'A 20-day window remains for negotiations, with a US trade delegation expected to visit India on 24th August,' he said, calling the move 'part of Trump's aggressive negotiation strategy' aimed at pushing India into a trade THAT FACE THE FIRST BLOWAmong the worst hit are labour-intensive explained that, structurally, India's economy is driven more by domestic demand and has limited direct exposure to the US, except in sectors like IT, pharmaceuticals and electronics, which are not part of the new tariff list. 'However,' he warned, 'sectors such as textiles, gems & jewellery, and leather may face sentimental pressure in the near term.'Rahul Ahluwalia, Founder-Director of the Foundation for Economic Development, said, 'The main sectoral impact will be felt by labour intensive areas which do not have tariff exemptions like apparel, gems, jewellery and other such sectors where overall we have more than 30bn USD of exports to the US.'SEAFOOD EXPORTS STUNNED BY DOOMSDAY-LIKE BLOWOne of the most severely hit industries is seafood. The US accounts for almost 40% of India's total seafood exports, valued at around Rs 60,000 crore. Most of this is Kumar G, president of the Seafood Exporters Association of India, told The Economic Times, 'We are shocked. This is a doomsday for the seafood industry. It will have an effect on the farmers too.' He also said the sector will need help from the government to exporter from the west coast told ET that about 15% of the industry's annual sales are held in inventory at any given time, and this unsold stock could lead to big losses. With the next harvest season underway, farmers may stop seeding operations entirely out of AND APPAREL EXPORTERS PUT MANUFACTURING ON HOLDadvertisementTextile exporters from Tiruppur, Noida and Surat have decided to halt manufacturing for US orders. The uncertainty created by the steep tariff hike has made it impossible for them to price their goods competitively.A Sakthivel, Chairman of the Tiruppur Exporters Association, told ET, 'The increased tariff will definitely impact the textile and apparel exports for the next 30-40 days till such time that India works out a favourable Bilateral Trade Agreement with the US.'Sanjay Jain, past president of the Confederation of Indian Textile Industry (CITI), said it's a major blow to the sector. 'New orders will not come. Old orders will have to be shipped at a loss,' he told ET, adding that this could lead to unemployment in textile and leather Mehra, Chairman of CITI, said, 'The doubling of US tariff is a huge setback for India's textile and apparel exporters it will significantly weaken our ability to compete effectively vis--vis many other countries for a larger share of the US market.'advertisementIndia's exports to the US in this sector had already been falling since April. In contrast, countries like Vietnam and Bangladesh reported year-on-year growth of 26.2% and 44.6%, respectively, in June AND JEWELLERY INDUSTRY MAY SHIFT TO DUBAI, MEXICOThe gem and jewellery sector is also reeling. The US is the largest market for Indian diamond and studded jewellery exports, worth Rs 83,000 crore in 2024-25. The new tariff is pushing the industry to look at alternative manufacturing Bhansali, Chairman of the Gem & Jewellery Export Promotion Council, told ET, 'The 50% tariff is a doomsday for the Indian gem and jewellery sector. We have to find alternate ways to do business with the US.'Bhansali said exporters will explore rerouting their products through countries like Dubai and Mexico. 'We will set up manufacturing units there quickly. Dubai is the nearest destination for us. We will also look into rerouting studded jewellery through Mexico, if required,' he said, adding that all business will be done to media reports, Titan Company is also considering shifting part of its manufacturing to the Middle East to retain access to lower US explained how difficult things have become for the industry. 'When the tariff was 25%, the industry had thought of recalibrating margins. But now with a 50% duty, it has simply become impossible for us to survive.'A US jewellery industry delegation is expected to visit India on August 19 to discuss the matter with Indian industry bodies and the commerce PARTS INDUSTRY HIT HARDThe tariff increase will affect nearly half of India's Rs 61,000 crore worth of auto parts exports to the US. While India does not export vehicles to the US, components like those used in commercial vehicles, tractors and earth-moving machines will now attract 50% to ET, the US already had a 25% duty in place since May 3 on cars, trucks and parts from all countries. Now, the scope has been industry executive said, 'While the tariffs levied this year now impact component exports across categories, today's announcement specifically will hit nearly half of the total exports business to the US.'The US is the top destination for Indian auto parts, accounting for 32% of shipments in AND ECONOMIC GROWTH UNDER THREATSakshi Gupta, Principal Economist at HDFC Bank, told ET that if the tariffs remain, the impact on employment and investments could grow worse. 'The second-round impact on private capex, domestic manufacturing as well as labour markets could emerge as a key risk over the coming months,' she also pointed out that the job market was already weak in the first quarter of FY26, with labour-intensive sectors like gems, jewellery, textiles, leather and footwear likely to suffer overall unemployment rate stood at 5.6% in June, with urban joblessness at 7.1% and rural at 4.9%.MACROECONOMIC CHALLENGES LOOMMadan Sabnavis, Chief Economist at Bank of Baroda, said India must act fast. 'This is not good news as the total rate will now be one of the highest imposed by the US. The clue is to negotiate with the government soon,' he told added that India now faces the difficult task of managing both a drop in exports and a rising oil import bill. This may bring wider implications for the economy and have warned that if the tariffs remain in place, the country's GDP growth could take a hit. The government may need to step in with support for affected sectors, especially small businesses that form the backbone of these India awaits a US delegation later this month, much will depend on how both sides approach the negotiations. For now, exporters are hoping for a resolution before the new rates go live on August 27.- Ends
Mint
4 days ago
- Business
- Mint
Trump's tariffs on India: Experts unveil this strategy for Indian stock market investors
Trump's tariffs on India: U.S. President Donald Trump, on Wednesday, an additional 25 per cent tariff on Indian imports as a punitive measure in response to New Delhi's ongoing purchases of Russian crude oil. With this move, the total U.S. tariff on Indian exports now stands at 50 per cent — 20 percentage points higher than the tariff on Chinese goods — posing a serious blow to India's export competitiveness. The revised tariff regime, revealed late Wednesday, is set to take effect after a 21-day grace period beginning August 27, 2025. Although this period offers a brief opportunity for diplomatic negotiations, both nations currently face limited avenues for resolution. Indian benchmark indices, Sensex and Nifty50, opened lower for the third consecutive session on Thursday, as investor sentiment was hit by the United States' decision to impose an additional 25% tariff on exports, sparking fears of economic repercussions and escalating global trade tensions. By 9:21 am, the BSE Sensex had dropped 266 points, or 0.33%, to 80,359, while the Nifty50 was trading 71 points lower, or 0.3%, at 24,502. " This punitive step threatens to derail the Indo-US strategic and economic relationship, which has evolved steadily since 1998. The implications of these levies extend beyond trade and into critical areas such as technology partnerships, H-1B visa access for Indian tech talent, cross-border capital flows, and the future of US firms' offshore manufacturing in India. The Indian government has strongly denounced the new measures as "unfair, unjustified, and unilateral", and is expected to explore both diplomatic and trade avenues to defend national interests. However, the near-term sentiment in financial markets is likely to remain cautious, as investors brace for potential retaliatory moves and await clarity from upcoming negotiations," said Sugandha Sachdeva- Founder-SS WealthStreet. According to Sachdeva, Nifty is hovering near a key support zone at 24,450, and a breach below this level could trigger a swift decline toward 24,180 in the short term. Key resistance in the near-term rests at the 24,750 and 24,950 levels. " Broader market sentiment may remain under pressure amid geopolitical uncertainty, with volatility expected to intensify, particularly in sectors sensitive to global trade flows, energy imports, and foreign capital exposure. Until there is visible progress on the diplomatic front or signs of a softened stance from the US administration, risk sentiment is expected to stay fragile, and a defensive approach may prevail among market participants. Eyes would also be on the Q1 earnings from several key companies which shall also influence the direction of the market," she said. Santosh Meena, Head of Research at Swastika Investmart, said that India remains a domestic consumption-driven economy, with limited direct exposure to the U.S., except in key sectors like IT, pharmaceuticals, and electronics, which are exempt from the current tariff announcement. However, sectors such as textiles, gems & jewellery, and leather may face sentimental pressure in the near term. Long-Term Investors: Stay the course. This development is a part of ongoing global trade tensions and shouldn't distract from India's long-term growth potential. Near-term volatility is an opportunity—not a threat—for long-term investors. Short-Term Traders: Exercise caution. The short-term outlook remains uncertain due to a combination of muted Q1 earnings, stretched valuations, and global trade tensions. Market texture appears weak in the near term, so a defensive and selective approach is advisable. However, any significant correction should be seen as a buying opportunity, as earnings momentum is expected to improve from the next quarter onward. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
Mint
4 days ago
- Business
- Mint
Indian shares fall after Trump doubles tariff; Nifty, Sensex slip to three-month lows
(Updates for morning trade) By Bharath Rajeswaran and Vivek Kumar M MUMBAI, Aug 7 (Reuters) - Indian shares fell on Thursday, with the benchmarks slipping to three-month lows, after the U.S. slapped an extra 25% tariff on Indian exports, stoking concerns over the economic impact of heightened trade tensions. The Nifty 50 was down 0.4% at 24,475.55 points and the BSE Sensex lost 0.38% to 80,236.69 as of 10:22 a.m. IST. Both benchmarks fell to their lowest intraday levels since May. The broader small- and mid-caps lost 0.4% each. U.S. President Donald Trump on Wednesday imposed the additional tariff on Indian goods, citing New Delhi's continued imports of Russian oil. "As such, there is no major fresh negative surprise. Moreover, a 20-day window remains for negotiations, with a U.S. trade delegation expected to visit India on August 24, which is trimming the losses in markets," said Santosh Meena, head of research at Swastika Investmart. If implemented, a 50% tariff could significantly impact trade flows, weigh on economic growth and trigger a near-term knee-jerk reaction in domestic markets, said Mahesh Patil, chief investment officer at Aditya Birla Sun Life AMC. Before the additional tariff announcement, the Reserve Bank of India retained its GDP growth forecast for the year at 6.5%, downplaying tariff-related uncertainties. Analysts said the additional tariff has also kept foreign investors on edge. Foreign portfolio investors have already pulled out Indian shares worth $900 million so far in August, following $2 billion in outflows in July. "The market's near-term texture looks fragile, weighed down by a double whammy of U.S. President Donald Trump's tariff aggression and underwhelming June-quarter earnings," Swastika's Meena said. Sectors such as textiles, gems, and jewellery are particularly vulnerable to further downside pressure, he added. Textile makers Trident, Gokaldas Exports , Arvind, KPR Mill and Welspun Living lost 0.7%-3%. In contrast, PVR Inox rose 4.2% after posting a sharply narrower quarterly loss, with multiple brokerages projecting stronger earnings visibility for fiscal 2026. (Reporting by Bharath Rajeswaran and Vivek Kumar M; additional reporting by Pranav Kashyap in Mumbai; Editing by Sumana Nandy, Nivedita Bhattacharjee and Sonia Cheema)
India Today
4 days ago
- Business
- India Today
Trump tariffs trigger volatility on D-Street: What should investors do?
Domestic stock markets opened on a jittery note Thursday after US President Donald Trump announced an additional 25% tariff on certain Indian exports, citing India's continued imports of Russian oil. While the move was widely expected, it has added another layer of uncertainty for investors already grappling with global Sensex slipped over 250 points at the open before paring some losses. The Nifty50 was also trading lower, reflecting broad-based caution and expectations of a volatile trading REMAINS HIGHDr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the 21-day window before the tariffs come into effect offers room for negotiation. However, the outlook remains clouded. 'There is huge uncertainty surrounding the trade policy and to what extent both nations will be willing to make compromises,' he said. 'President Trump, fresh from the successes he has extracted in deals with others,others, including the EU, is unlikely to budge significantly from his unjustified stand. Unfortunately for India, the US is bargaining from a position of strength.'He praised India's 'mature and measured' response so far but warned that the market could remain under pressure in the near term. 'Export-oriented sectors will remain weak. Domestic consumption themes like banking and financials, telecom, hotels, cement, capital goods and segments of automobiles will remain resilient,' Vijayakumar CAUGHT OFF GUARDAccording to Santosh Meena, Head of Research at Swastika Investmart, markets had already priced in this escalation to an extent. 'This move was largely anticipated by the markets, as President Trump had earlier hinted at such a development. As a result, there is no fresh negative surprise,' he noted that India has so far resisted pressure from Washington, especially in protecting its politically sensitive agriculture and dairy sectors. He characterised the tariff hike as 'part of Trump's aggressive negotiation strategy' and pointed to the upcoming US trade delegation visit on August 24 as a key moment to believes India's core economic strength lies in domestic demand, and that acts as a buffer. 'India remains a domestic consumption-driven economy, with limited direct exposure to the US, except in key sectors like IT, pharmaceuticals, and electronics,' he said, adding that these have been spared from the latest tariff list. However, textiles, gems and jewellery, and leather may come under 'sentimental pressure in the near term.'Rahul Ahluwalia, Founder-Director of Foundation for Economic Development, said, 'The main sectoral impact will be felt by labour-intensive areas which do not have tariff exemptions, like apparel, gems, jewellery and other such sectors where overall we have more than 30bn USD of exports to the US.'WHAT SHOULD INVESTORS DO? advertisementFor long-term investors, Meena advises staying invested. 'This development is part of ongoing global trade tensions and shouldn't distract from India's long-term growth potential,' he said, suggesting that short-term corrections could offer entry opportunities ahead of an expected earnings revival in the coming traders, however, may want to be more defensive. 'The short-term outlook remains uncertain due to a combination of muted Q1 earnings, stretched valuations, and global trade tensions,' Meena said. 'A selective approach is advisable.'With geopolitical tensions rising and domestic indicators turning soft, investors are bracing for a volatile ride. Export-facing sectors may struggle in the near term, but experts seem to suggest that India's underlying consumption story remains intact.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends
India Today
4 days ago
- Business
- India Today
Sensex, Nifty fall as Trump announces additional tariffs; experts advise caution
Benchmark stock indices opened Thursday's trading session on a weak footing, reacting to fresh trade tensions triggered by U.S. President Donald Trump's announcement of an additional 25% tariff on select Indian exports, citing New Delhi's continued imports of Russian Sensex opened nearly 250 points lower and was trading down 131.05 points at 80,412.94 by 9:22 am, while the Nifty50 slipped 67.25 points to 24,506.95. The early session hinted at high volatility, with traders preparing for wild swings amid a mix of global and domestic VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that while there is room for negotiation, uncertainty is high. 'The 21-day window for the additional 25% tariff to take effect leaves room for negotiation and an eventual deal with the US,' he said. 'But there is huge uncertainty surrounding the trade policy and to what extent both nations will be willing to make compromises.' Vijayakumar added that President Trump is 'unlikely to budge significantly from his unjustified stand,' especially after extracting concessions from other major trade partners. 'Unfortunately for India, the U.S. is bargaining from a position of strength. India's response has been mature and measured,' he a market standpoint, he expects continued weakness in the near term, particularly in export-focused sectors. 'Since uncertainty is high, investors should be cautious in their approach. At least in the near-term, export-oriented sectors will remain weak. Domestic consumption themes like banking and financials, telecom, hotels, cement, capital goods and segments of automobiles will remain resilient.'Santosh Meena, Head of Research at Swastika Investmart, echoed similar sentiments. 'This move was largely anticipated by the markets, as President Trump had earlier hinted at such a development. As a result, there is no fresh negative surprise,' he said, noting that the 20-day gap before implementation and the planned U.S. trade delegation's visit to India on August 24 leave the door open for sees the tariff hike as part of Trump's larger 'aggressive negotiation strategy,' aimed at extracting a favourable trade deal. 'India has shown resistance—particularly in protecting its agriculture and dairy sectors, which are politically and economically sensitive,' he also stressed that India's economic structure offers some insulation. 'India remains a domestic consumption-driven economy, with limited direct exposure to the U.S., except in key sectors like IT, pharmaceuticals, and electronics,' he said—sectors which are exempt from the current tariff list. However, 'textiles, gems & jewellery, and leather may face sentimental pressure in the near term.'WHAT SHOULD INVESTORS DO?Meena advises long-term investors to stay put. 'This development is a part of ongoing global trade tensions and shouldn't distract from India's long-term growth potential,' he said, adding that any sharp correction could be a buying opportunity, with earnings momentum likely to pick up from the next short-term traders, however, caution is key. 'The short-term outlook remains uncertain due to a combination of muted Q1 earnings, stretched valuations, and global trade tensions. Market texture appears weak in the near term, so a defensive and selective approach is advisable,' Meena to the bearish mood, Prashanth Tapse, Senior VP (Research) at Mehta Equities, flagged multiple red flags for Dalal Street. 'Bears are likely to take control of Dalal Street today amid multiple headwinds—Trump's tariff hike on Indian goods, heavy FII selling (7,588 crore this week), a weak Q1FY26 earnings season, rupee depreciation towards 87.83, and a deteriorating Nifty technical setup,' he also highlighted concerns over the RBI's policy tone. 'The RBI's neutral stance despite holding repo rates at 5.5% is seen as hawkish, further dampening sentiment,' he noted, adding that 'with Nifty now eyeing support at 24,473 and 24,046, the outlook has turned decisively bearish.'As trade tensions escalate and global cues turn murkier, investors are likely to tread with caution, especially in export-linked pockets of the market, while defensives and domestic stories may offer some shelter in the storm.- EndsTune InTrending Reel
