Stock market indices Sensex and Nifty projected for a subdued opening due to apprehensions over tariff issues
The United States' decision to impose a 25% tariff on Indian goods, effective August 1, is causing significant challenges for Indian exports, particularly for sectors with a large exposure to the US market. This tariff increase, linked to India's continued purchase of Russian oil, is expected to halt about $12 to 15 billion of Indian exports to the US, as no importer or consumer is willing to bear such enormous cost increases.
As a result, foreign institutional investors have exited Indian shares, although some retail investors remain. This move threatens to disrupt India’s export momentum and could undermine the narrative of India’s growing global stature under Modi’s administration. If these tariffs persist, India may have to rethink its export strategies and trading relationships, potentially leading to longer-term shifts in its economic patterns.
Regarding a potential oil partnership with Pakistan, the sources do not provide specific information. Given the geopolitical sensitivities and complex India-Pakistan relations, formal substantial oil partnerships between the two countries have historically been limited or non-existent. Any new developments in this area would likely be significant but are not documented in the available sources.
In other economic news, the US dollar surged to the highest level since May, while oil prices were slightly lower after three days of gains. The Indian rupee slumped against the dollar on Wednesday due to trade deal uncertainty, month-end demand for dollars, and foreign fund outflows.
The economy grew an annualized 3% in the second quarter of 2025, rebounding from a 0.5% contraction in the first quarter. U.S. private payrolls increased more than expected in July.
In the stock market, the Dow shed 0.4%, the S&P 500 slid 0.1%, and the tech-heavy Nasdaq Composite rose 0.2%. The Federal Reserve left interest rates unchanged in a divided vote. Benchmark indexes Sensex and Nifty experienced modest gains on Wednesday due to improved growth forecasts by the IMF. European stocks ended on a flat note, with the pan-European STOXX 600 ending flat with a negative bias.
The Indian government is examining the implications of the US tariff and remains committed to a fair and balanced trade deal with the US. Jerome Powell, the Federal Reserve Chair, signaled caution on the likelihood of a rate cut in September.
Gold prices rebounded from a one-month low due to increased trade uncertainty. Asian markets were mixed this morning as investors assessed U.S. tariffs on South Korea and awaited the Bank of Japan's policy decision.
[1] Source: The Economic Times, URL [2] Source: Business Standard, URL
- Foreign institutional investors' exit from Indian shares due to US tariffs might impact personal-finance decisions, causing potential concerns among retail investors.
- The escalating US-India trade tensions, including the imposition of tariffs and India's oil purchases, are posing challenges for Indian business and finances, potentially necessitating revisions to India's export strategies.
- In the world of technology, advancements in digital platforms for personal-finance management are revolutionizing sports sponsorships, as companies leverage these platforms to attract fans and increase brand visibility.
