Gift Nifty tumbled more than 200 points on Wednesday after US President Donald Trump signed an executive order imposing an additional 25% tariff (making it a total of 50% tariffs) on a broad range of Indian exports. The move comes in response to India’s continued import of Russian oil, despite ongoing Western sanctions. The index, which tracks Indian equities listed on the GIFT City platform, fell 204 points to 24,536. This also signals a sharply lower opening for the Nifty 50 on Thursday.
The executive order, set to take effect on August 27, invokes the International Emergency Economic Powers Act and the National Emergencies Act. The order takes aim at sectors like textiles, automobiles, and jewellery. However, pharmaceuticals and semiconductors have been exempted under Section 232 of the Trade Expansion Act of 1962. Goods already en route to the US before the implementation date will not be subject to the new tariffs. “I find that the Government of India is currently directly or indirectly importing oil from the Russian Federation,” Trump said in the order, justifying the move.
Meanwhile, with the new duties in place, the effective tariff on many Indian exports will rise to 50%, matching the rates previously applied to Brazilian goods. The White House has also mentioned that the order leaves room for future revisions, depending on India’s response, whether it opts to retaliate or takes steps to align more closely with the US’ interests.
The announcement came a day after Trump escalated pressure on India over its continued purchase of Russian oil, warning that additional tariffs could be imposed within 24 hours. “India has not been a good trading partner because they do a lot of business with us, but we don’t do business with them. So we settled on 25 percent, but I think I’m going to raise that very substantially over the next 24 hours, because they’re buying Russian oil. They’re fueling the war machine,” Trump said in an interview with CNBC on Tuesday.