US President Donald Trump’s announcement of reciprocal tariffs in late February has not stopped the Nifty 50 from gaining, with the benchmark index rising nearly 10% by April 26 to date.
On February 28, 2025, the BSE Sensex and Nifty 50 saw a steep decline. The Sensex finished the day at 73,198.10, down 1,414 points or 1.90%. The Nifty 50 closed 420 points or 1.86% lower at 22,124.70. However, the markets recovered and surged more than these levels by the end of April.
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Further, the US announced a 27% “reciprocal” tariff on Indian goods starting April 9. The Nifty 50 initially dipped 0.6% on that day but quickly rebounded, gaining 8.6% from April through the rest of the month.
On July 30, Trump announced his first “secondary tariff,” targeting India to penalise its trade with Russia. Furthermore, on August 1, Trump announced an additional 25% tariff, raising the overall levy to 50% on Indian goods imported to the US.
This somewhere jittered the investor confidence on April 26, a day ahead of the tariff deadline. “Domestic market sentiment turned cautious as the US penalty tariff deadline expires tomorrow. Investors are closely monitoring the Government of India’s efforts to support economic growth, including proposed GST rate revisions and sector-specific relief measures for industries affected by higher tariffs,” said Vinod Nair, Head of Research at Geojit Investments.
Tariff Impact on GDP
Not just the markets, the experts believe that India’s GDP will also not take much of a hit. “While US tariffs may affect nearly 0.9% of India’s GDP, their impact on GDP growth can be contained to just 0.1 percentage point with appropriate countermeasures like export diversification, stronger domestic demand, and advancing trade partnerships,” said EY in a research report.
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India exports around $45 billion worth of goods to the US. Sectors such as textiles, and gems and jewellery are expected to face moderate pressures.
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