Indian stocks weathered U.S. President Donald Trump’s tariff storm with minor bruises on Thursday as investors expect the South Asian nation to benefit from a relatively lower tariff rate than its Asian peers.
Trump on Wednesday slapped a 26% reciprocal tariff on India, though an annexure to the order listed it at 27%, as a part of his plan to impose a 10% baseline tariff on all trade partners, with higher duties on dozens of countries, including China.
The Nifty 50 fell 0.35% to 23,250.1 and BSE Sensex lost 0.42% to 76,295.36, but fared better than most Asian peers, as analysts said India’s relatively lower reciprocal tariffs compared to China, Vietnam, and Thailand could offer a competitive edge.
Key stock indexes in China and Hong Kong fell 0.3% and 1.5%, while Thailand and Vietnam traded about 1% and 6.7% lower.
Trump’s tariffs have stoked fears of a U.S. recession, sending IT stocks down 4.2%, their sharpest drop in two years, and weighing on the Nifty 50. Analysts have warned of broader ripple effects on the U.S. economy, a key revenue source for Indian IT firms.
Akshat Garg, assistant vice president at Choice Wealth, said the impact could persist for a few sessions and may derail near-term market momentum given the sector’s heavy weightage on the benchmark indexes.
India’s equity benchmarks edge higher; investors brace for US tariffs
Meanwhile, the Indian rupee rose 0.08% to the U.S. dollar, holding up reasonably well amid a dip in most Asian currencies.
“India is relatively well-off, especially if some China or Vietnam exports get rerouted,” Harsh Gupta, fund manager of PIPE at Ionic Asset said.
Six of the major equity sectors logged losses on the day. The broader smallcaps and midcaps rose 0.6% and 0.2%, respectively.
In contrast, pharma firms jumped 2.25% after Trump exempted pharmaceutical products from the list of imports hit by reciprocal tariffs, offering a silver lining to the sector.
“Pharma stocks were being beaten down in 2025 so far due to the tariff uncertainty, now those stocks could witness a rally since the tariff announcement has no negative effect,” said Sreeram Ramdas, vice president at Green Portfolio PMS.
Sun Pharma and Cipla rose about 3.4% each and were among the top gainers on the Nifty 50. Lupin gained 4.2% on the day.
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