The Indian stock market fell sharply in Tuesday’s session, with benchmark indices losing over 1% after U.S. President Donald Trump’s administration confirmed an additional 25% tariff on Indian imports, a penalty announced earlier this month by Washington for India’s continued purchase of Russian oil.
The Nifty 50 closed the session with a steep loss of 255 points, or 1.02%, at 24,712, while the S&P BSE Sensex declined 1.05% to 80,779. Broader markets also witnessed heavy selling, with the Nifty Midcap 100 falling 1.62% and the Nifty Smallcap 100 plunging over 2%.
The 25% penalty will come into effect from August 27, taking total tariffs on Indian imports of up to 50%, the highest among U.S. trading partners. This has raised concerns among Dalal Street investors that it could weigh on India’s economic growth at a time when the country is trying to recover from the slowdown of the last fiscal year.
Export-oriented stocks bore the brunt of the sell-off, particularly textiles, chemicals, and gems & jewellery, shrimp, whose top line is heavily dependent on the U.S. market.
Trade negotiations between India and the U.S. have paused after five rounds of talks, as Washington pressed New Delhi to open access to genetically modified (GM) crops such as corn and soybeans. Both are major crops grown on a large scale across India, which the government refused to allow in order to protect these sensitive sectors.
Meanwhile, Prime Minister Narendra Modi on Monday reaffirmed that the interests of farmers and small-scale industries remain paramount for the central government. He emphasized that even if pressure on the government increases, it will withstand it.
Over 80 Nifty 500 stocks crashed between 3% and 9%
The sell-off was broad-based, with 81 constituents of the Nifty 500 ending sharply lower. Vodafone Idea emerged as the top laggard, reversing the previous day’s gains and plunging 9.3% to ₹6.70 apiece after reports suggested that the government is not considering additional relief for the company on pending Adjusted Gross Revenue (AGR) dues.
In April, the government had converted the company’s outstanding spectrum auction dues into equity. ACME Solar Holdings also slumped 6% to ₹285.70, snapping its two-day winning run, while Swan Energy fell 6% to ₹453.75 on profit booking after recent sharp gains.
Other notable losers included Ceat, Kirloskar Oil Engines, Balrampur Chini Mills, Sai Life Sciences, and KFIN Technologies, all sliding over 5%. Vedanta too dropped 5% to ₹428. PG Electroplast, which had staged a recovery in recent sessions, slipped back into the red with a 4.6% decline to ₹557.25.
Likewise, Sonata Software tumbled 4.5% to ₹364.25, alongside weakness in several other counters.
The pharma pack also came under heavy pressure after Donald Trump vowed to cut drug prices in the U.S. by an unprecedented “1,400–1,500 percent” and reiterated his threat to impose higher tariffs on pharma imports.
Trump had earlier written to major drugmakers, demanding that they reduce U.S. drug prices and align them with the lower rates charged in other countries for new medicines.
RattanIndia Enterprises, Ola Electric were among the few stocks that withstood the sell-off
In the gainers’ list, RattanIndia Enterprises led the pack, advancing 10.2% to ₹58.2 on the back of a sharp surge in trading volumes. It was followed by eClerx Services and Craftsman Automation, which rose 5.1% and 4.7%, respectively.
Ola Electric Mobility shares also ended with a strong 4.6% gain at ₹50.8 apiece after the company announced it had secured certification for compliance with eligibility assessment requirements under the Production-Linked Incentive (PLI) Scheme for the automobile and auto components sector.
Snapping a three-day losing streak, Britannia Industries strengthened 4% to ₹5,765 apiece. Waaree Energies, Vishal Mega Mart, Devyani International, PVR INOX, Eicher Motors, Ipca Laboratories, Hindustan Unilever, LT Foods, and Linde India were also among the stocks that closed with gains of over 2%.
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