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Benchmarks make gap-down opening after Trump imposes 27% tariff on Indian imports
Apr-03-2025

Indian equity benchmarks made gap-down opening and are trading under pressure on Thursday following US President Donald Trump's announcement of reciprocal tariffs, raising concerns over potential disruptions to trade and supply chains. US President Donald Trump announced a comprehensive tariff strategy termed ‘Liberation Day’, aiming to address trade imbalances and bolster domestic manufacturing. India is notably impacted by this policy, facing a 27 per cent tariff on its exports to the US President Trump highlighted that India imposes a 52 per cent tariff on American goods, describing the US response as a ‘discounted’ reciprocal tariff. Though, downside remained capped as FIEO stated that the 27 per cent tariffs or import duties announced by US President Donald Trump on India will undoubtedly affect domestic players, but India is much better placed than many other countries.

On the global front, Asian markets are trading in red, despite the broadly positive cues from Wall Street overnight, after US President Donald Trump announced steeper-than-expected reciprocal tariffs on US trade partners, heightening concerns over a global trade war that could destabilize major economies. Back home, pharma stocks are trading with jubilation after US President Donald Trump did not make any specific reciprocal tariff announcements with regards to the Pharma sector. Currently, India charges a 10% tariff on Pharma imports from the US, while the US does not impose any tariff on imports of Indian pharmaceutical items. 

The BSE Sensex is currently trading at 76280.66, down by 336.78 points or 0.44% after trading in a range of 75807.55 and 76381.74. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.32%, while Small cap index was down by 0.01%.

The few gaining sectoral indices on the BSE were Healthcare up by 2.57%, Utilities up by 0.52%, Power up by 0.23% and Consumer Durables up by 0.14%, while IT down by 2.97%, TECK down by 2.40%, Auto down by 1.17%, Metal down by 0.96% and Oil & Gas down by 0.85% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 4.49%, Titan Company up by 1.55%, Power Grid up by 0.89%, NTPC up by 0.87% and Bajaj Finance up by 0.74%. On the flip side, TCS down by 3.06%, Tech Mahindra down by 3.06%, HCL Technologies down by 2.99%, Infosys down by 2.77% and Tata Motors down by 1.94% were the top losers.

Meanwhile, expressing concerns over India’s exports, India's apex exporters' body, Federation of Indian Export Organisations (FIEO), has stated that the 27 per cent tariffs or import duties announced by US President Donald Trump on India will undoubtedly affect domestic players. However, Ajay Sahai, Director General and CEO of the FIEO said India is much better placed than many other countries. He expressed hope that the proposed bilateral trade agreement (BTA), currently being negotiated between the two countries, would be concluded at the earliest, as it would provide relief from these reciprocal tariffs.

Sahai said ‘We have to assess the impact, but looking at the reciprocal tariffs imposed on other countries, we are in a lower band. We are much better placed compared to our key competitors such as Vietnam, China, Indonesia, Myanmar, etc. We will definitely be affected by the tariffs, but we are much better placed than many others’. The US President highlighted the high tariffs charged by India on American products as he announced reciprocal tariffs on countries worldwide, declaring a 27 per cent ‘discounted reciprocal tariff’ on India. As he made the announcement, he held up a chart that showed the tariffs that countries like India, China, the UK, and the European Union charge, along with the reciprocal tariffs these countries will now have to pay.

The chart indicated that India imposed 56 per cent tariffs, ‘including currency manipulation and trade barriers,’ and that America would now charge India a ‘discounted reciprocal tariff’ of 27 per cent. Trump said ‘India, very, very tough. Very, very tough. The Prime Minister just left. He’s a great friend of mine, but I said, ‘You’re a friend of mine, but you’re not treating us right. They charge us 52 per cent…’. From 2021-22 to 2023-24, the US was India’s largest trading partner. The US accounts for about 18 per cent of India’s total goods exports, 6.22 per cent in imports, and 10.73 per cent in bilateral trade. With America, India has a trade surplus (the difference between imports and exports) of $35.32 billion in goods in 2023-24. This was $27.7 billion in 2022-23, $32.85 billion in 2021-22, $22.73 billion in 2020-21, and $17.26 billion in 2019-20.

In 2024, India’s main exports to the US included drug formulations and biologicals ($8.1 billion), telecom instruments ($6.5 billion), precious and semi-precious stones ($5.3 billion), petroleum products ($4.1 billion), gold and other precious metal jewellery ($3.2 billion), ready-made garments of cotton, including accessories ($2.8 billion), and products of iron and steel ($2.7 billion). Imports included crude oil ($4.5 billion), petroleum products ($3.6 billion), coal, coke ($3.4 billion), cut and polished diamonds ($2.6 billion), electric machinery ($1.4 billion), aircraft, spacecraft and parts ($1.3 billion), and gold ($1.3 billion).

The CNX Nifty is currently trading at 23229.95, down by 102.40 points or 0.44% after trading in a range of 23145.80 and 23280.80. There were 18 stocks advancing against 31 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Sun Pharma up by 4.51%, Dr. Reddy's Lab up by 3.02%, Cipla up by 2.65%, Titan Company up by 1.45% and Shriram Finance up by 0.84%. On the flip side, Tech Mahindra down by 3.16%, TCS down by 3.15%, HCL Technologies down by 3.10%, Infosys down by 2.78% and Bajaj Auto down by 2.64% were the top losers.

Asian markets are trading lower; Nikkei 225 slipped 1116.3 points or 3.12% to 34,609.57, Hang Seng declined 366.62 points or 1.58% to 22,835.91, KOSPI fell 20.01 points or 0.8% to 2,485.85, Shanghai Composite weakened 17.04 points or 0.51% to 3,333.09 and Straits Times was down by 2.43 points or 0.06% to 3,951.78.
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