Indian equity markets plunged sharply on Monday, triggered by renewed trade tensions after former U.S. President Donald Trump announced plans to double tariffs on steel and aluminium imports. The benchmark BSE Sensex fell over 700 points in early trade, while the NSE Nifty slipped by more than 200 points, reflecting widespread investor anxiety during an already volatile earnings season.

Domestic equity benchmarks opened on a strong note today, buoyed by positive sentiment following India’s climb to the position of the world’s fourth-largest economy. At 9:32 am, the Sensex surged 640.3 points or 0.78% to 82,361.46, while the Nifty rose 187.39 points or 0.75% to 25,040.45.

Broad-based gains were seen across sectors. The Nifty Bank index advanced 408.25 points to 55,806.50. The Nifty Midcap 100 added 426.60 points to 57,114.35, and the Nifty Smallcap 100 rose 145.90 points to 17,789.25.

Analysts noted that India’s rise in global economic rankings has provided a sentiment boost to investors. Additionally, the Reserve Bank of India's larger-than-expected dividend payout to the government is expected to aid in containing the fiscal deficit within the 4.4% target for FY26.

“This development supports the ongoing low inflation trend and expectations of a rate cut cycle, which are favourable for equities,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. He also pointed out that while foreign institutional investors (FIIs) showed strong buying earlier in May, recent flows have turned unpredictable.

Among the top Sensex gainers were M&M, PowerGrid, NTPC, Tata Motors, ICICI Bank, and Tech Mahindra. Eternal was the sole stock trading in the red.

Asian markets showed a mixed trend: Tokyo, Seoul, and Bangkok traded higher, while Hong Kong, Jakarta, and Shanghai were in the red. On Wall Street, major indices closed lower in the previous session.

FIIs were net buyers on May 23 with inflows of ?1,794.59 crore, while DIIs added ?299.78 crore. Market focus this week will remain on India’s GDP figures, US Fed minutes, and key inflation data.

India’s economy is poised to grow at 6.5% in the current fiscal year, supported by a robust domestic foundation and rising investment momentum, Confederation of Indian Industry (CII) President Sanjiv Puri said in a recent interview. He asserted that despite ongoing global geopolitical tensions, India remains resilient and well-positioned to weather short-term shocks.

“The fundamentals are strong—interest rates have eased, inflation is moderating, and personal income tax concessions that kicked in from April 1 will bolster consumption,” Puri said, adding that private investment is gaining traction across sectors such as energy, transportation, metals, chemicals, and hospitality.

While acknowledging the cautious sentiment triggered by geopolitical uncertainties, including trade tensions and conflicts, Puri stressed the importance of focusing on long-term growth strategies. “The economy is entering the year with a strong base, and this provides us the confidence that 6.5% growth is achievable,” he said.

Addressing the rising trend of global protectionism, Puri advocated for pursuing bilateral trade agreements with key partners like the United States and the European Union. “More and more barriers to trade are coming in. Bilateral pacts that align with national interests can ensure sustained access to global markets,” he explained.

He also proposed a three-tier tariff framework to boost competitiveness and support domestic industries. “It’s vital that we press hard on domestic growth drivers—agriculture, climate adaptation, and structural reforms,” Puri said.

On consumption trends, Puri noted that rural demand is beginning to recover, and urban consumption is expected to pick up in the coming quarters. He expressed hope for further interest rate cuts to stimulate demand and investment.

“In the face of global uncertainty, India’s path forward lies in building internal resilience and strategic international engagement,” he concluded.

Indian equity markets opened lower on Friday amid escalating tensions with Pakistan following India's targeted anti-terror operations under Operation Sindoor. The conflict flared after Pakistan attempted retaliatory aerial strikes on Indian military installations in Jammu, Pathankot, and Udhampur—attempts that were successfully neutralised by Indian air defence systems.

The Sensex initially plunged over 1,300 points in pre-market trades but pared much of the losses by market open. At 10:15 AM, the benchmark index was down by around 800 points at 79,462, while the Nifty hovered near 23,987, about 200 points lower than the previous close.

Despite geopolitical pressures, select stocks showed resilience. Titan, Larsen & Toubro, BEL, and Tata Motors were among early gainers, while Power Grid, ICICI Bank, Ultratech Cement, and Eicher Motors traded in the red.

Analysts believe the market's moderate response is driven by India’s evident military advantage and supportive macroeconomic factors. “In a typical war-scare scenario, the markets would have been hammered. But this time, India’s conventional superiority and strong global positioning are stabilising forces,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Adding to market strength, a weak US dollar and signs of economic slowing in the US and China are bolstering foreign investor confidence in Indian equities. Foreign institutional investors pumped over ?2,000 crore into the markets on Thursday, exchange data shows.

India’s Operation Sindoor, launched in response to the Pahalgam terror attack that killed 26 civilians, targeted terror infrastructure in Pakistan and Pakistan-Occupied Kashmir. The operation has pushed Pakistan into a defensive posture, with global attention once again drawn to its role in fostering cross-border terrorism.

While tensions remain high, markets are expected to navigate the situation with caution and strength, anchored by India’s strategic advantage and global investor faith.

Dr. Vijay Kalantri, Chairman of MVIRDC World Trade Center Mumbai and President of the All India Association of Industries (AIAI), has welcomed the signing of the India-UK Free Trade Agreement (FTA), describing it as a historic and transformative milestone in India's foreign trade policy journey.

“At a time of growing protectionism and global trade uncertainties, this modern and comprehensive FTA reaffirms India’s commitment to rules-based global trade and deep economic integration with leading economies,” Dr. Kalantri stated. “It reflects India’s dynamic approach to international trade, focused on boosting exports, strengthening industries, and generating employment.”

Covering 99% of tariff lines and almost 100% of the trade value, the agreement offers nearly complete tariff elimination for India in the UK market across a wide array of goods and services. Sectors expected to benefit include labour- and technology-intensive industries such as textiles, leather, marine products, sports goods, toys, gems and jewellery, engineering goods, automotive components, and organic chemicals. “This level of market access will greatly enhance the competitiveness of Indian products in the UK, providing a vital edge over its competitors,” Dr. Kalantri remarked.

He particularly emphasized the immense benefits for India’s MSMEs ecosystem, which forms the backbone of the country’s manufacturing and exports. The FTA simplifies regulatory requirements and reduces non-tariff barriers, enabling Indian MSMEs to enter and expand in the UK market with greater ease.

A standout feature of the agreement is the exemption of Indian professionals and their employers from paying social security contributions in the UK for up to three years. “This provision will significantly reduce the financial burden on Indian service exporters and enhance their competitiveness, especially in IT, financial services, architecture, engineering, and education,” Dr. Kalantri noted. “It also opens new job opportunities and strengthens India’s position as a global services hub.”

The agreement also ensures easier mobility for Indian professionals, business visitors, intra-corporate transferees, and independent professionals such as yoga instructors and artists, reinforcing the deepening people-to-people ties between India and the UK.

Dr. Kalantri highlighted that the FTA aligns with India’s larger vision of achieving USD 2 trillion in exports in the coming years. "With this being the 14^th FTA India has signed in the past decade, we are clearly witnessing a shift in strategy from a defensive to a proactive trade policy. This new deal will also lend momentum to India's ongoing trade negotiations with the European Union and other major economies."

He added, “This FTA will pave the way for stronger bilateral relations and play a pivotal role in cushioning the impact of recent U.S. tariff hikes. However, to fully leverage such FTAs, India must focus on enhancing the capacity and competitiveness of its industries. Expanding the scope of the Production Linked Incentive (PLI) scheme to include more sectors could be a strategic step in this direction.”

He further noted that the agreement reflects both nations' shared commitment to fair trade, transparency, and regulatory cooperation. “As two vibrant democracies and global innovation hubs, India and the UK have set a benchmark for ambitious and forward-looking trade agreements.”

Indian equities surged over 2% in early trade today, tracking strong gains in Asian markets after US President Donald Trump hinted at a possible relaxation of steep auto import tariffs. The BSE Sensex jumped over 1,500 points at the open, while the Nifty reclaimed the 23,000 mark, led by a sharp rally in automobile stocks. Market sentiment turned positive following Trump’s remarks that he was "very flexible" on trade policies and was "looking at something to help some of the car companies," easing investor concerns.

The rupee also strengthened, appreciating 39 paise to 85.71 against the US dollar, buoyed by a softer dollar index. Forex traders noted that the weak greenback supported the rupee’s upmove despite ongoing foreign capital outflows.

Trump had earlier imposed a flat 25% tariff on auto imports, sparking global market jitters. His recent comments, however, have triggered a relief rally, although analysts caution that volatility is likely to persist given his unpredictable policy stance. While hopes of a tariff reprieve lifted sentiments across Asia, new US duties on tech and pharma imports continue to cloud the global outlook. Investors remain cautiously optimistic, bracing for further twists in the global trade narrative. 

As trade tensions between the United States and China intensify, Beijing has suspended the export of several key rare earth elements, magnets, and metals—components critical to industries ranging from defense to consumer electronics. The move, reported by The New York Times, underscores China’s strategy to weaponize its dominance over rare earth supply chains amid the ongoing trade war.

China produces about 90% of the world’s rare earth elements—17 metals vital for technologies like electric vehicles, missiles, semiconductors, and AI hardware. Beijing’s latest export controls cover heavy rare earths like samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium-related products. These are now subject to stringent licensing, with shipments at several ports already halted.

The crackdown is seen as retaliation for U.S. tariff hikes, and while not an outright ban, Beijing is leveraging slow or limited licensing to throttle supply. Analysts warn this could paralyze global supply chains, as most nations, including the U.S., have limited domestic production or reserves. American companies such as Lockheed Martin, Tesla, and Apple, all of which rely on Chinese rare earths, face serious disruption.

The U.S. has only one rare earth mine and limited stockpiles, inadequate for long-term needs, especially for defense contractors. China's move doesn't only impact the U.S.; the new rules apply globally, making it harder for industries worldwide to secure essential materials for electric motors, drones, jet engines, lasers, and smartphones.

David Merriman of consultancy Project Blue emphasized that China also controls indirect supply routes via Myanmar and Laos. The suspension highlights China’s leverage in the tech and defense race, and as its new regulatory system takes shape, the global impact on manufacturing and innovation could be profound, potentially shifting strategic alliances and industrial policy worldwide.

Indian stock markets opened sharply higher on Friday, buoyed by a midweek rally in the US markets and a temporary easing of global trade tensions. The BSE Sensex surged 1,061.26 points to 74,941.53, while the NSE Nifty opened at 22,754.05, climbing 354.90 points.

The rally was triggered by US President Donald Trump’s announcement of a 90-day suspension of reciprocal tariffs on 75 countries, including India, amidst heightened trade friction with China. This move sparked optimism across global markets, temporarily calming investor nerves.

Market expert Ajay Bagga explained, “The sharp upmove in Indian equities is driven by Wednesday’s gains in the US markets. However, Thursday’s decline in US indices and the Gift Nifty’s lower premium suggest a more muted follow-through. With Monday being a market holiday in India, we may see some position unwinding later today.”

Despite Friday’s early surge, sentiment remains fragile. US markets reversed gains on Thursday, with the Dow Jones falling over 1,000 points and the Nasdaq sliding 4.5%, reflecting continued concern over escalating tariffs between the US and China. Beijing’s decision to raise tariffs on American imports to 84% was met by a counter from Washington, lifting tariffs on Chinese goods to 125%.

While the US Dollar Index (DXY) dropped to 100—potentially encouraging flows to emerging markets like India—analysts warned of persistent volatility. Safe-haven assets gained traction, with gold in India hitting a record Rs91,500 per 10 grams. The Japanese yen and Swiss franc also saw increased inflows.

In corporate developments, Tata Consultancy Services (TCS) missed earnings estimates, prompting several brokerages to revise their target prices downward.

As global uncertainties deepen, experts urge investors to remain cautious, recognizing that the current rally may be short-lived amidst ongoing trade disruptions and fragile sentiment.

India has officially withdrawn the trans-shipment facility that allowed Bangladeshi export cargo to pass through Indian land customs stations (LCSs) en route to Indian ports and airports for third-country trade. The Central Board of Indirect Taxes and Customs (CBIC), through a circular dated April 8, announced the rescission of its earlier directive from June 29, 2020. While cargo already in transit will be allowed to exit under existing procedures, no new shipments will be permitted under this facility.

The move follows repeated requests from Indian exporters, especially in the apparel sector, who complained of increased air freight rates, congestion at cargo terminals, and reduced air cargo space due to Bangladesh’s use of Indian infrastructure. The Apparel Export Promotion Council (AEPC) had flagged issues at Delhi’s air cargo complex, citing delays, inefficiencies, and inflated freight costs as major concerns.

Trade experts believe this decision will benefit Indian exporters in sectors like textiles, footwear, and gems and jewellery, by improving cargo flow and reducing transit time and costs. "This will decongest airports and improve competitiveness of Indian exports," said AEPC Secretary General Mithileshwar Thakur.

However, the move is expected to disrupt Bangladesh’s third-country trade, as its exporters heavily rely on Indian routes. It may also affect landlocked countries like Nepal and Bhutan that use India as a transit corridor to trade with Bangladesh.

Ajay Srivastava of the Global Trade Research Initiative noted that strategic and geopolitical factors may also be at play, particularly Bangladesh’s growing engagement with China near the sensitive Siliguri Corridor.

India-Bangladesh trade reached $12.9 billion in 2023–24. Relations between the two countries have recently been strained, with India voicing concern over rising attacks on minorities under Bangladesh’s interim government.

The United States’ imposition of 27% retaliatory tariffs on Indian goods has dealt a significant blow to India’s gems and jewellery exports, according to the Gem and Jewellery Export Promotion Council (GJEPC). The move, part of the Trump administration’s strategy to reduce trade deficits and boost domestic manufacturing, is expected to disrupt India’s $10 billion export volume to the US.

GJEPC emphasized the urgent need for the Indian government to expedite a bilateral trade agreement with the US to safeguard long-term sectoral interests. “The new tariffs could reshape global supply chains and severely impact India’s position in the US market,” the council warned.

The US currently imports $11.58 billion worth of gems and jewellery from India, while exports to India stand at $5.31 billion, making the bilateral trade in the sector worth $16.89 billion. The new duties could raise tariffs from zero to 20% on loose diamonds and from 5.5–7% on gold jewellery.

Kama Jewelry MD Colin Shah called the tariffs a “big setback” and highlighted that nearly 30% of India’s jewellery exports head to the US. “The hike in import duties will burden Indian exporters and American consumers alike,” he added.

GJEPC also pointed out that India imposes a 20% import duty on gold, silver, and platinum jewellery from the US. Rationalising import duties and ensuring balanced trade are necessary to prevent retaliatory measures, it said.

PNG Jewellers CMD Saurabh Gadgil noted that the impact on domestic jewellery businesses may be limited since India does not import such products from the US. However, rising costs of Asian imports could fuel inflation in the US, undermining the very economic goals the tariffs aim to achieve.

President Donald Trump declared a 25% tariff on auto imports Wednesday, aiming to boost domestic manufacturing. The White House expects the move to generate $100 billion annually, though it may strain automakers relying on global supply chains.

"This will spur growth," Trump stated, emphasizing that the tariffs—effective April 3—are “permanent.” While he argues they will drive production back to the U.S., critics warn of higher vehicle costs and reduced consumer options.

Economists predict price hikes, with imported cars potentially rising by $12,500. "This hits middle- and working-class buyers hardest," said Mary Lovely of the Peterson Institute. With new cars averaging $49,000, more households may be priced out of the market.

Markets reacted swiftly, with General Motors' stock falling 3% and Stellantis losing 3.6%. Ford saw slight gains.

Foreign leaders condemned the move. Canadian Prime Minister Mark Carney vowed to defend Canadian industries, while European Commission President Ursula von der Leyen warned of negative economic impacts. "Tariffs are taxes—bad for businesses and consumers alike," she stated.

The tariffs cover both finished vehicles and parts, applying to non-U.S. content under the USMCA trade pact. The White House argues U.S. automakers have capacity to ramp up domestic production.

To soften the impact, Trump proposed allowing tax deductions on auto loan interest—provided the vehicle is made in America. However, this could offset some revenue gains from the tariffs.

This move is part of Trump’s broader trade policy, which includes new tariffs on steel, aluminum, and Chinese imports. He has also placed 25% duties on Mexico and Canada, though portions were suspended after industry pushback.

With global tensions rising, Trump’s aggressive trade strategy is set to reshape U.S. economic relations in the coming months.