Thu Apr 03 07:15:53 UTC 2025: ## India Cautiously Reacts to Trump’s New Tariffs; Stock Market Dips

**New Delhi, India** – India reacted with a mixture of relief and disappointment Thursday following US President Donald Trump’s announcement of a sweeping 26% tariff on Indian exports. While the benchmark Nifty index dipped nearly 0.3% in morning trading, Indian exporters expressed cautious optimism, noting that the tariffs, while high, could have been significantly worse.

Trump, while announcing the tariffs, described Indian Prime Minister Narendra Modi as a “great friend” but added that India had “not been treating us right.” The Indian government has yet to issue an official statement.

Ajay Sahai, director general of the Federation of Indian Export Organisations, told AFP that the tariffs, while hurting export demand, were lower than those imposed on competing nations like China, Indonesia, and Vietnam. This, he suggested, could provide India with an opportunity to gain market share. However, he cautioned that widespread retaliation and a decline in global trade would negatively impact all parties.

A silver lining appeared for India’s pharmaceutical sector, which was exempted from the tariffs. Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, highlighted the sector’s crucial role in global public health and economic stability. Consequently, the Nifty Pharma index rose over 2.5% in morning trading.

Experts suggest India’s response should consider China’s reaction to the tariffs, given China’s substantial industrial capacity and history of dumping goods in global markets. A New Delhi-based think tank, the Global Trade Research Initiative, even posited that the tariffs could present an opportunity for India to strengthen its position in global trade and manufacturing, particularly in textiles and garments, where competitors like China and Bangladesh face higher levies. India’s ongoing negotiations for a bilateral trade agreement with the US add another layer of complexity to the situation. Prior to the tariff announcement, India had attempted to ease trade tensions by reducing tariffs on certain US products.

Read More