Authors:
K. Ashwini, M. Dharmananda, B. S. Harisha, Anjali Ganesh

Addresses:
Department of Management Studies, Nitte Meenakshi Institute of Technology, Yelahanka, Bangalore, Karnataka, India.  Department of Business Administration, St. Joseph College of Engineering, Mangaluru, Karnataka, India.

Abstract:

The US's 26% tariff on Indian goods on April 3, 2025, shook global financial markets. Rapidly struck Indian stock exchanges. The Nifty 50 fell 743 points, or 3.24%, and the BSE Sensex fell 2,200 points, or 2.95%, by April 7. Tariffs affect export-focused industries and investor confidence. Initial research indicates that the tariff shock affected U.S. export-dependent industries such as autos, chemicals, solar energy, industrial machinery, and textiles. TATA Motors (15%) and Sona BLW Precision Forgings (45% U.S. exposure) suffer. PI Industries and UPL depend on the U.S. market for 20% and 11–13% of their revenue. In renewables, Waaree Energies struggles. Over half of its ₹5,000 crore order book depends on U.S. demand, making it vulnerable to U.S. economic conditions. This regulation threatens Welspun Living, Trident, and Indo Count, which get 40% to 60% of their sales from the U.S., leading to decreased investor confidence. From April 4-15, FIIs withdrew ₹9,780 crore from Indian equities, deepening the market downturn. The Indian Rupee declined 1.2% against the U.S. dollar, from 82.10 to 83.25, amid trade uncertainties and pressure on the current account. India's exports are vulnerable to global policy changes, especially protectionist ones. India should control currency risk, diversify exports, and engage in proactive trade diplomacy. This study, along with 10 detailed tables, examines the economic consequences of the tariff hike and helps policymakers and industry players prepare for global trade crises.

Keywords: Geopolitical Tension; U.S. Tariff Impact; Market Volatility; Bank Nifty Recovery; Investor Sentiment; Sector Vulnerability; Trade Diplomacy; Investor Confidence.

Received on: 11/08/2024, Revised on: 30/10/2024, Accepted on: 08/01/2025, Published on: 07/06/2025

DOI: 10.69888/FTSML.2025.000420

FMDB Transactions on Sustainable Management Letters, 2025 Vol. 3 No. 2, Pages: 63-77

• Views : 220
• Downloads : 12

Download PDF