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Benchmarks trade under pressure after Trump raises tariffs on India to 50%
Aug-07-2025

Indian equity benchmarks made a negative start on Thursday and are trading under pressure in early deals after US President Donald Trump slapped an additional 25 percent tariff, raising it to 50 percent, on goods coming from India as penalty for New Delhi's continued purchase of Russian oil, a move that is likely to hit sectors such as textiles, marine and leather exports hard. The Ministry of External Affairs has called the decision ‘extremely unfortunate’ and said the government will continue to protect national interests. Traders were concerned as Federation of Indian Export Organisations (FIEO) DG Ajay Sahai said the US' decision to impose an additional 25% tariff on Indian goods is extremely shocking and will impact 55% of India's exports to US. Additionally, sustained selling by foreign portfolio investors (FPIs) dampened markets sentiments. Foreign investors offloaded shares worth Rs 4,999 crore on a net basis on Wednesday.

On the global front, Asian markets are trading higher following the broadly positive cues from Wall Street overnight, after U.S. President Donald Trump said the U.S. was closing in on the trade deal with China. Traders also remain optimistic about the US Fed cutting interest rates as early as September based on the recent economic data from the U.S.

The BSE Sensex is currently trading at 80330.82, down by 213.17 points or 0.26% after trading in a range of 80208.28 and 80421.84. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.01%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.36%, IT up by 0.22%, Realty up by 0.08%, TECK up by 0.04% and FMCG up by 0.01%, while Power down by 0.44%, Metal down by 0.39%, Telecom down by 0.39%, Bankex down by 0.39% and Basic Materials down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Trent up by 0.52%, Tech Mahindra up by 0.49%, ITC up by 0.34%, Titan Company up by 0.23% and Infosys up by 0.20%. On the flip side, Kotak Mahindra Bank down by 1.53%, Tata Motors down by 1.28%, Adani Ports & SEZ down by 1.15%, Reliance Industries down by 0.64% and Ultratech Cement down by 0.49% were the top losers.

Meanwhile, US President Donald Trump has slapped an additional 25 per cent tariff on goods coming from India as penalty for New Delhi's continued purchase of Russian oil, a move that is likely to hit sectors such as textiles, marine and leather exports hard. Trump signed an executive order - Addressing Threats to the US by the Government of the Russian Federation - imposing the additional tariff over and above the 25 per cent levy which comes into effect from August 7. After this order, the total tariff on Indian goods, barring a small exemption list, will be 50 per cent. While the initial duty becomes effective on August 7, the additional levy will come into effect after 21 days or August 27.

He said ‘I find that the Government of India is currently directly or indirectly importing Russian Federation oil. Accordingly, and as consistent with applicable law, articles of India imported into the customs territory of the United States shall be subject to an additional ad valorem rate of duty of 25 percent’. India buys about 88 per cent of its crude oil, which is converted into fuels like petrol and diesel, from overseas. Russian oil made up for hardly 0.2 per cent of all crude oil that India imported till 2021. After Moscow invaded Ukraine, Russian oil was available at a discount to international benchmarks due to western sanctions, and was quickly lapped up by Indian refiners. Russia is now India's largest oil supplier. In July, India imported about 5 million barrels of oil a day, of which 1.6 million barrels came from Russia.

After the new levy, India will attract the highest tariff of 50 per cent along with Brazil. After this, India's competitors will be much better placed in the US market as their duty is lower - Myanmar (40 per cent), Thailand and Cambodia (both 36 per cent), Bangladesh (35 per cent), Indonesia (32 per cent), China and Sri Lanka (both 30 per cent), Malaysia (25 per cent), Philippines and Vietnam (both 20 per cent). There was no immediate response from the Indian government on the fresh levy. The announcement comes at a time when a US team is scheduled to visit India from August 25 for the sixth round of negotiations for the proposed bilateral trade agreement (BTA).

The CNX Nifty is currently trading at 24504.55, down by 69.65 points or 0.28% after trading in a range of 24460.05 and 24542.90. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 1.70%, Trent up by 0.68%, Wipro up by 0.48%, ITC up by 0.42% and Nestle up by 0.35%. On the flip side, Tata Motors down by 1.52%, Eternal down by 1.47%, Adani Ports & SEZ down by 1.35%, Kotak Mahindra Bank down by 1.34% and Adani Enterprises down by 0.93% were the top losers.

All Asian markets are trading higher; Taiwan Weighted jumped 581.91 points or 2.48 to 24,029.27, Nikkei 225 surged 271.14 points or 0.66 to 41,066.00, Hang Seng advanced 73.37 points or 0.29 to 24,984.00, Jakarta Composite gained 46.88 points or 0.62 to 7,550.63, Straits Times rose 32.83 points or 0.78 to 4,260.53, KOSPI increased 22.87 points or 0.72 to 3,221.01 and Shanghai Composite was up by 4.41 points or 0.12 to 3,638.40.
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