In April 2025, the Indian stock market experienced significant volatility following the U.S. announcement of a 26% tariff on Indian imports, part of President Trump’s “Liberation Day” tariff policy. This move intensified global trade tensions, leading to a sharp decline in Indian markets.
On April 7, the Nifty 50 index fell by 3.24%, and the Sensex dropped by 2.95%, marking one of the steepest single-day declines in recent times. Export-dependent sectors, particularly IT and metals, bore the brunt of the downturn. Investor sentiment was further dampened by foreign institutional investors withdrawing over $1 billion from Indian equities.
However, a temporary reprieve came on April 11 when the U.S. paused tariffs for most countries, excluding China. This led to a 1.67% rise in the Nifty 50 and a 1.61% increase in the Sensex, indicating a short-term recovery.
Despite this, the overarching U.S.-India trade war in 2025 continues to pose challenges. The impact of U.S. tariffs on India remains a critical concern, affecting investor sentiment and the broader Indian stock market. As global trade tensions persist, stakeholders must navigate this uncertain landscape cautiously.
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