Indian stock markets closed sharply lower on Friday as investor sentiment was rattled by escalating global trade tensions, triggered by former US President Donald Trump’s revised tariff policy. The Sensex dropped over 1%, while the NIFTY IT index plunged 3%, reaching a 10-month low of 33,663.55, as traders priced in the impact of higher US import duties on Indian goods.
The fresh wave of selling was sparked by the White House’s updated tariff annex, released Friday, which confirmed a 26% tariff on Indian imports to the US—down from the previously listed 27%, but still among the highest in the updated list of 14 affected countries.
The latest White House document clarified inconsistencies flagged earlier by a Bloomberg report, which had noted discrepancies between the tariffs shown in charts during Trump’s April 2 announcement and the figures published in the annex. For instance, South Korea's rate was revised to 26% from 25%, while some regions such as Reunion, Saint Pierre and Miquelon, and Norfolk Island were removed from the final list.
Under Trump’s "reciprocal tariff" executive order, a default 10% global tariff came into effect on April 5 for all US trading partners. However, key countries like India face significantly higher import tariffs of 26%, based on what Trump describes as a "corrective" policy to address trade imbalances.
Trump’s Position on India and Trade
Trump justified the tariffs by pointing to India’s high import duties on US products and its perceived failure to offer reciprocal treatment in trade negotiations. He referred to Indian Prime Minister Narendra Modi as a "valuable ally" but expressed disappointment over the lack of balanced trade terms.
This policy continues Trump’s decades-long opposition to globalization and commitment to protectionist trade practices, which he has consistently advocated since his 2016 presidential campaign. His tariffs are part of a broader effort to reduce the US’s current account deficit, which has persisted for over 50 years, despite conventional economic theories suggesting self-correction over time.
According to Bloomberg, the new US tariff structure is staggered by country and product, with rates ranging from 0% to 99%. The average tariff rate now stands at 20% on an unweighted basis and 41% on an import-weighted basis—figures that underscore the severity of the trade overhaul.
