The U.S. administration’s surprising move to impose a 25% tariff on Indian goods, coupled with penalties tied to India’s continued oil purchases from Russia, jolted financial markets globally on July 30, 2025. The announcement prompted a sharp fall, as Gift Nifty futures plunged about 170 points (0.7%), reflecting broader investor anxiety.

In India, markets largely remained muted despite robust corporate performance. Larsen & Toubro stood out with a 4% rise after beating profit estimates, helping lift early sentiment. Yet investor optimism was tempered by fears over export viability and escalating trade friction ahead of the August 1 deadline for a U.S.-India deal.

While some export sectors - like electronics, machinery, and textiles could face serious repercussions, India’s economy is seen as relatively shielded compared to regional peers. IT services and pharmaceuticals, for instance, are largely unaffected due to tariff exemptions or lower exposure. The RBI has flagged the situation as a potential global shockwave, despite existing resilience from domestic demand and policy buffers.