It has been over 24 hours since the 50 per cent tariffs on Indian imports to the United States officially took effect, an event which the stock market also displayed ripple effects of as benchmark indices BSE Sensex and NSE Nifty dropped on Thursday, August 28.
In another development, India extended exemption of import duties on cotton in relief to the textile industry which stands exposed to getting hit hard due to US President Donald Trump's tariffs.
Also Read | Who gets hit, who escapes Trump's 50% tariffs on India: Details on sectors affected
Trump's 25 per cent additional tariffs on goods going from India to the US kicked in on Wednesday, August 27, doubling the total duties on Indian imports to 50 per cent. A 25 per cent tariff was already in place.
Donald Trump has attributed India's Russian oil purchase for the additional tariff move.
India tariffs | 5 latest developments
{{/usCountry}}Donald Trump has attributed India's Russian oil purchase for the additional tariff move.
India tariffs | 5 latest developments
{{/usCountry}}– What US said on India tariffs: US treasury secretary Scott Bessent on Wednesday hinted that channels are open for dialogue, saying that the India-US relationship is “very complicated” but he believes the two sides will “eventually come together”.
“I do think India is the world’s largest democracy and the US is the world’s largest economy. At the end of the day, we will come together,” Bessent said in a television interview, while acknowledging tensions over trade and Russia. He reiterated his earlier statements, where he accused India of “profiteering” off Russian energy sales and “tapping us along” on trade talks.
Also Read | 'Strategic disaster’: How US politicians, experts blasted Donald Trump over 50% tariffs on India
Before the tariffs kicked in, President Donald Trump had called PM Modi a “terrific man” and claimed he told India and Pakistan during the military conflict in May this year that he will put “head-spinning” high tariffs on both.
– How India reacted: While there was no official statement from India on the additional 25 per cent tariffs coming into force, minister of state (MoS) for external affairs Kirti Vardhan Singh told reporters on Wednesday that the government is taking steps to ensure the Trump move does not harm the Indian economy. "We are taking appropriate steps so that it does not harm our economy, and let me assure you that the strength of our economy will carry us through these times," Singh said.
– Stock markets tumble: The Indian stock market showed ripple effects of the Trump tariffs as both benchmark indices – Sensex and Nifty – opened lower on Thursday. The stock market was closed on Wednesday on account of Ganesh Chaturthi. Textile, leather, gems and jewellery stocks were hit the most on Thursday morning as the 50 per cent tariffs mainly affect these sectors.
Also Read | Stock Market: Sensex, Nifty 50 crack as textile, footwear, jewellery stocks take biggest hit from US tariffs
The 30-share BSE Sensex dropped 693.02 points to 80,093.52 during morning trade on Thursday while the 50-share NSE Nifty slipped 204.85 points to 24,507.20.
– White House officials 'Modi's war' remark: White House trade adviser Peter Navarro said Ukraine conflict is “Modi’s war”, saying the “road to peace” runs partly “right through New Delhi”. Navarro is US President Donald Trump’s Senior Counsellor for Trade and Manufacturing.
In an interview to Bloomberg on Wednesday, Navarro claimed that “India is helping feed the Russian war machine”. His remarks come days after he called India a "Maharaj" in tariffs that is running a "profiteering scheme" by using discounted Russian crude oil.
“Everybody in America loses because of what India is doing. The consumers and businesses and everything lose, and workers lose because India's high tariffs cost us jobs and factories and income and higher wages, and then the taxpayers lose, because we got to fund Modi's war,” Navarro said in the Bloomberg interview.
– India extends cotton import duty exemption: The central government on Thursday extended the exemption of import duty on cotton till December 31 in relief to the country’s garment industry, which has been hit hard by a 50 per cent tariff on goods going to the United States.
The first exemption of import duties on cotton was announced in a government order late on August 18. India had exempted import duties on cotton until September 30.
A Press India Bureau (PIB) release on Thursday said that the exemption is being extended till December 31 to “augment availability of cotton for the Indian textile sector”.