Indian Markets Decline as Tariffs Loom from Trump Administration

BENGALURU, India — Indian equity markets opened lower on Tuesday, reflecting declines among Asian peers, following President Donald Trump’s announcement regarding upcoming tariffs. The Nifty 50 index dipped 0.64% to 21,979.85 by 9:15 a.m. IST, while the BSE Sensex fell 0.45% to 72,753.64.

All 13 major sectors recorded losses at the open, with small- and mid-cap stocks declining by approximately 1% each. The MSCI Asia ex-Japan index also dropped about 0.6%, mirroring an overnight decline on Wall Street.

Trump’s proposed tariffs of 25% on goods from Canada and Mexico, along with a cumulative 20% levy on products from China, are set to take effect at 10:31 a.m. IST. Additionally, he indicated that reciprocal tariffs would begin on April 2, intensifying existing trade tensions.

Market analysts warn that these elevated tariffs could negatively impact global economic growth while potentially causing inflation in the U.S., leading to sustained higher interest rates. Such conditions may deter investment flows into emerging markets like India.

Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta, commented on the situation, stating, “It seems that tariffs are definitely going to go through, and it increases the chances of a real economic fallout. The markets are not psyched to stick around for that.”

The responses from the markets indicate growing concerns, particularly in the manufacturing sector. Recent U.S. economic data, showing steady manufacturing in February, revealed a spike in factory gate prices to a nearly three-year high, accompanied by longer delivery times for materials.

The repercussions from Trump’s tariff announcements have been felt across North America, with the Canadian dollar and Mexican peso hitting one-month lows. This reaction exemplifies the ripple effects of U.S. trade policies on neighboring economies.

The implications for Indian markets are significant, especially as investors brace for potential volatility. Major share sectors across Indian markets are facing pressure as market participants respond to the broader implications of rising tariffs.

In conclusion, the introduction of these tariffs is expected to have far-reaching consequences, not only for the U.S. economy but also for its trading partners and emerging markets dependent on stability and growth.