India’s benchmark indexes fell on Friday as investors fretted over the implications of U.S. President Donald Trump’s plans to impose reciprocal tariffs, which analysts said could hurt the country the most among its Asian peers.
Trump is planning to slap reciprocal tariffs on every country taxing U.S. imports. The imposition of these duties, however, is likely to be delayed, helping global stocks stage a relief rally.
Indian Prime Minister Narendra Modi met Trump on Thursday and offered to talk about easing tariffs, buying more U.S. oil and gas, combat aircraft and trade concessions.
However, that did little to calm markets back home. The Nifty 50 (.NSEI), opens new tab lost 0.44% to 22,929.25 while the BSE Sensex (.BSESN), opens new tab fell 0.26% to 75,939.21.
“Indian markets have seen sharper losses on the day due to the high tariff differential with the U.S., compared to most other Asian economies,” said Narendra Solanki, head of research at Anand Rathi.
Analysts said the potential consequences of U.S. tariffs on the Indian rupee and U.S. interest rates could trigger further foreign outflows, hurting domestic equities.
Both the Nifty and Sensex have lost about 2.5% this week, their worst in 2025 so far.
In contrast to domestic equities, other Asian markets rose, with the MSCI Asia ex-Japan index (.MIAPJ0000PUS), opens new tab gaining 1.1% on the day.
All 13 major domestic sectors were down. Drug makers (.NIPHARM), opens new tab, which have a significant revenue exposure to the United States, fell the most with a 3% decline.
The small-caps (.NIFSMCP100), opens new tab and mid-caps (.NIFMDCP100), opens new tab tumbled 3.6% and 2.4%, respectively, extending their downward trend on concerns over slowing corporate earnings and stretched valuations.
The small-cap index is currently down about 21.6% from its record closing high on December 11 confirming bear territory. The mid-caps are 18.4% below their peak closing level on September 24.
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