US Tariff Hits Indian Exports; Markets, Talks Affected

Indian equity markets dropped sharply after U.S. President Donald Trump announced a 25% tariff on Indian exports starting August 1, along with an unspecified penalty tied to India's energy and defense transactions with Russia. The tariffs, higher than those on other major trading partners, threaten to derail ongoing U.S.-India trade negotiations, now set to resume in mid-August. All 16 major sectors in Indian markets registered losses, with export-oriented industries such as textiles, pharmaceuticals, and automotive components among the hardest hit; companies like Welspun Living and Vardhman Textiles saw significant stock declines. The move is part of an effort to address the $42.7 billion U.S. trade deficit with India and shift Indian imports away from Russia. Foreign institutional investors have continued to withdraw funds from Indian equities, fueling further market and currency volatility. Investors remain cautious amid the ongoing uncertainty.