Trump's tariffs rattled global markets. Nifty fell over 10% from its peak in early 2025. Here's a clear breakdown of which sectors are being hit, which are safe, and how Indian investors should respond.
The US is India's single largest export market — accounting for over $80 billion in annual exports. When the US imposes tariffs on Indian goods, it makes Indian products more expensive for American buyers, potentially reducing demand and hurting revenues of Indian exporters. This directly impacts share prices of companies in export-heavy sectors.
Beyond direct impact, tariff announcements create fear and uncertainty. Foreign Institutional Investors (FIIs) pull money out of emerging markets like India when global trade risks rise — causing Nifty and Sensex to fall even for companies with no US exposure.
Nifty 50 hit an all-time high of ~26,300 in September 2024. By early 2025, amid tariff fears and FII outflows, it corrected to around 21,900 — a fall of over 16%. Sensex followed similarly. The sharpest falls came on days when Trump made major tariff announcements, as FIIs sold heavily and moved money to safer assets including gold and US treasuries.
By April 2026, markets have partially recovered as India-US trade tensions eased with the bilateral deal reducing tariffs on Indian goods to 18%. Nifty stabilised around 23,000-24,000 levels. However, the US-China trade war continues to create periodic volatility.