The Indian stock market opened in the red following the US tariff announcement, with major indices facing a 0.78% gap down. Nifty 50 dropped 182 points, while Sensex declined 805 points at the opening. The IT sector faced significant pressure, with Nifty IT falling over 2%, Nifty FIN Service drop 141 points.
On April 2, 2025, U.S. President Donald Trump announced a 26% tariff on Indian imports, citing the country’s high tariffs on American goods. Speaking from the White House Rose Garden, he referred to the day as “Liberation Day” and stated, “They [India] are charging us 52%, and we have charged almost nothing for years and decades.”
This decision is part of a broader effort to address trade imbalances, with the U.S. set to impose a 10% baseline tariff on all imports starting April 5. Higher tariffs are also being applied to specific countries, including a 34% duty on Chinese imports and 46% on Vietnamese goods.
The announcement triggered significant market reactions. The Indian rupee weakened in the non-deliverable forward (NDF) market, with the dollar/rupee one-month NDF quoted at 85.86-85.90, suggesting a potential 10-15 paisa decline when onshore trading begins. Additionally, the Sensex plummeted by 1,500 points as investors responded to the news.
In response, India has shown a willingness to offer tariff reductions on over half of U.S. imports, valued at $23 billion, marking one of its largest concessions in recent years.
Economists and analysts warn that these tariffs could lead to higher consumer prices, disruptions in global supply chains, and an escalation of trade tensions.
