What may very well be the impression of Trump’s tariff flip flop on Indian inventory market?

Donald Trump’s newest tariff threats have added volatility to international inventory markets, with India rising as a key participant within the US president’s commerce realignment technique.
India put a 9.5% tariff on US items, whereas the US imposes simply 3% on Indian merchandise. As reciprocal tariffs loom, industries like vehicles, prescribed drugs, textiles, and metal are in danger. Regardless of a brief rally this week, the Nifty stays down 14% from its peak, with smallcaps in bear market territory. Over $15 billion has been pulled out by Overseas Institutional Traders (FIIs) in 2025 alone.
Overseas Portfolio Traders (FPIs) have maintained their promoting pattern in Indian equities this March, with whole fairness outflows reaching Rs 24,753 crore as of March 7, bringing the year-to-date whole to Rs 1,37,354 crore in CY25, in response to ET report.
Volatility and danger aversion
India is especially susceptible to tariff hikes, with key sectors dealing with important threats. The Indian Rupee has weakened, and overseas funding is retreating as a consequence of considerations a couple of slowdown.
Ross Maxwell, International Technique Operations Lead at VT Markets mentioned that India’s vehicle, pharmaceutical, textiles, and metal sectors might face extreme impacts. Nonetheless, India’s diplomatic method—centered on commerce negotiations and tariff rationalization—might assist mitigate dangers. YES Securities suggests lowering tariffs on US imports like metal and inspiring American corporations like Tesla to enter India, which might function leverage towards potential retaliatory tariffs.
Short-term negotiations
VK Vijayakumar, Chief Funding Strategist at Geojit Monetary Companies, explains that markets understand Trump’s strikes as short-term negotiations relatively than long-term tariff impositions, acknowledging that sustained tariffs might damage the US financial system. In response, China and Germany have already applied home stimulus measures to counterbalance the consequences of Trump’s insurance policies, including one other layer of complexity to the worldwide financial panorama
Pharma sector and market sentiment
The pharmaceutical sector, which holds 35% of the US market, faces short-term challenges however could profit in the long run as a consequence of India’s aggressive benefit over China. Amisha Vora, Chairperson & MD of PL Group, emphasised that regardless of tariff considerations, India stays extra aggressive than China, which faces a 20% tariff. Sandip Sabharwal, a market knowledgeable, identified that large-cap pharma shares like Solar Pharma and Lupin have already skilled sell-offs however stay well-positioned except tariffs escalate considerably.
Regardless of international uncertainties, Indian markets present resilience. Vinod Nair, Head of Analysis at Geojit Monetary Companies, famous that India’s markets have remained sturdy regardless of fairness outflows from rising markets.
Amisha Vora sees the present dip as an funding alternative. “With ongoing reforms and India’s demographic benefit, the market will probably carry out higher, even amidst commerce wars,” Vora instructed ET suggesting a possible correction of 4-5% within the brief time period.
(Disclaimer: The opinions, analyses and suggestions expressed herein are these of brokerage and don’t replicate the views of The Occasions of India. At all times seek the advice of with a certified funding advisor or monetary planner earlier than making any funding selections.)