India’s stock market fell sharply on Monday after US President Donald Trump’s sweeping new tariffs triggered a global sell-off. The shares continued to fall sharply with the Sensex and Nifty crashing about 5 per cent in early trade mirroring a sharp fall in global equities. This triggered a panic across Dalal Street with the red dominating trading screens. The Nifty Metal index crashed 8%, while IT stocks shed over 7%. Autos, real estate, and oil and gas stocks fell more than 5% each, dragging broader indices sharply lower. Small-caps plunged 10% and mid-caps fell 7.3%. This wiped out nearly ₹19 lakh crore in investor wealth. Now here comes the big question: Can India’s ‘Make in India’ survive the Sensex crash?
The Impact Of These Tariffs On India’s economy?
A 10% tariff could cause India to lose $6 billion in exports, amounting to 0.16% of its GDP. A 20% tariff could lead to a loss of $31 billion in exports, which is 2.1% of the GDP. If the 26% tariff is between these two, then its impact can be big. But some reports say that the impact can be slightly less. SBI Research says that a 15-20% tariff will reduce India’s exports by 3-3.5%. Citi Research has warned that up to $7 billion can be lost every year.
How will These Tariffs Affect Global Trade And India’s strategy?
According to US President Donald Trump and the new tariffs, its clear that the country is trying to protect its own businesses by limiting imports. And If in the case other countries also react to this by imposing their own taxes, it will disturb the international trade. India might gain a small benefit if some tariffs are reduced, but overall, global trade might become unstable, and rising prices (inflation) could follow.
These new tariffs can affect many industries. Sectors like seafood, iron and steel, machines, medicines, jewellery, and electrical equipment might face the biggest impact. Other areas like clothes, cars, and electronics could also face problems. For example, if India raises taxes on cars, it could hurt the export of car parts. Products like gems, medicines, and chemicals that India sells in large amounts to the US may also be affected.
Make In India Plan
India’s ‘Make in India’ plan could do well if it uses this chance to become a part of the changing supply chains. But to succeed, India must find new buyers in different countries, improve the quality and value of its products, and become more competitive in the global market. To compensate for major tariff repercussions in China, some brands reportedly plan to shift production to India and export their products to Western markets. Apple and Samsung are expected to boost their focus on local production in the region. Apple is likely to choose India as its main export hub for shipments to the US, while it will rely on China to serve the European, Asian, and Latin American markets.
4o India continues to attract multinational giants looking to diversify away from China.
Government’s Incentives
The Indian government’s PLI scheme is helping boost manufacturing in the country. So far, Apple’s partners have received more than 75% of the ₹8,700 crore given under this scheme. The goal is to make India a global center for manufacturing by giving money as a reward to companies that make products in India. This attracts both Indian and foreign companies to invest. The scheme also encourages companies to export more, which helps improve India’s trade situation.
