Key sectors, including textiles, gems, and leather, may face pressure, while defensive sectors such as pharmaceuticals and IT may remain relatively unaffected.
On Wednesday, U.S. President Donald Trump dropped a tariff bombshell by announcing an additional 25% tariff on Indian imports, in addition to the 25% already imposed earlier this month. This means that many Indian goods heading to the U.S. could now face a total duty of 50%, effective Aug. 27.
The reason? Trump claims India is still buying oil from Russia, indirectly supporting the war. SEBI-registered analyst Pradeep Carpenter noted that this move has shaken up India’s export market and could impact investor sentiment when markets open on Thursday. With the new tariffs targeting consumer goods such as textiles, leather, and jewelry, stocks like Welspun India, Titan, and Motherson Sumi could come under pressure, while defensive sectors may offer a temporary refuge.
India has strongly opposed the tariff move, calling it politically motivated. Officials say oil imports are based on national interest and that other Western nations continue to quietly purchase Russian goods. The government may explore retaliation, take up the matter in global trade bodies, or try behind-the-scenes diplomacy, according to Carpenter.
What Goods Will Be Affected?
The tariff primarily targets consumer-focused goods, including garments and textiles, jewelry and gems, footwear and leather items, and automotive parts.
Indian companies that heavily export to the U.S. in these sectors may see stock pressure, he noted. This includes stocks such as Welspun India, KPR Mill, Vaibhav Global, Titan, Liberty Shoes, and Motherson Sumi.
What’s Exempted From This Tariff Shock?
Not all key sectors will be impacted. Among those exempted are pharmaceuticals (especially generic medicines), smartphones, and electronics (like those assembled in India for global brands).
Additionally, auto components (most are exempt, but classification matters), IT services, and engineering goods are safe for now.
Carpenter observed that since these industries are considered essential or strategically important for the US, they’ve been spared for now.
When Do Tariffs Come Into Effect?
This new 25% duty will kick in from August 27, 2025. That means any Indian goods entering the U.S. after that date will be charged the full duty. Shipments already in transit or cleared before that deadline are safe.
Exporters now have about three weeks to speed up shipments or change plans, he said.
50% Tariff Shock: Impact on Indian Markets
Carpenter highlighted that markets are likely to open on a weak note, with export-linked midcaps, especially in textiles, gems, and leather, seeing some trading pressure on Thursday.
Meanwhile, defensive sectors like FMCG and pharma may attract safe-haven buying. He advised investors to watch the rupee, which could weaken due to trade tensions.
Carpenter concluded that Trump’s tariff move is a political message and not just a trade action. While not all sectors are hurt, key Indian exporters will feel the heat. With global trade tensions rising again, Thursday could see nervous trading, but smart investors may also find selective opportunities, he cautioned.
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