US 50% Tariff Impact: Indian Equity Market Selloff and Pressure on India’s Export Sectors

The imposition of a 50% US tariff on Indian goods has triggered a sharp selloff in the Indian stock market, with immediate and measurable pressure on key export-driven sectors such as textiles, gems and jewellery, seafood, chemicals, and auto components.

India’s stock indices dropped significantly after the tariffs went into effect, with Nifty 50 falling below 24,550 and Sensex dropping over 600 points in opening trade. Fourteen of sixteen major sectors logged losses, and foreign portfolio investors have pulled out over ₹17,101.6 crore from Indian equities in August—the largest outflow since February. The benchmark indices continued to experience volatility and selling pressure, particularly for export-oriented companies.

Sectoral Impact

The tariffs affect an estimated $48.2 billion worth of Indian exports, especially labour-intensive sectors highly reliant on access to the US market.

• Textiles and Apparel: Textile stocks are among the worst affected after the US imposed a 50% tariff. Companies such as Himatsingka Seide (83% of FY24 revenue from the US), Gokaldas Exports (77%), Indo Count (70%), and Welspun Living (65%) face higher costs. The tariff also removes India’s cost advantage over competitors like Bangladesh and Vietnam.

• Gems and Jewellery: The 50% US tariff on Indian jewellery could reduce price competitiveness, lower export volumes, and pressure margins. SMEs may face the biggest impact, including job losses and liquidity issues. Exporters may seek alternate markets, focus on value-added products. Titan, through its Tanishq brand, is the largest listed exporter to the US in the organised segment. Its FY24 exports were around ₹350 crore, accounting for only 1–2% of total revenue.

• Seafood: The seafood industry, a major exporter, is now facing commercial unviability and significant job losses in export-driven hubs. Nearly half of India’s shrimp exports are shipped to the US. Listed exporters such as Avanti Feeds and Apex Frozen Foods will bear the brunt as US retail chains shift suppliers.

• Chemicals: India’s chemicals industry in yearly exports, with SMEs contributing nearly 40%, is likely to encounter stronger competition from nations such as Japan and South Korea that benefit from favourable US tariff arrangements. Earlier, Indian chemical exports to the US faced lower tariffs, but now they will attract a 50% duty. This move is likely to affect companies such as Aarti Industries and Atul Ltd, which derive more than 30% of their revenue from the US market.

• Leather Goods and Sports Equipment: The leather Goods and Sports Equipment industry is likely to lose competitiveness. Both leather goods and footwear are now subject to the full 50% tariff, adding further strain to a sector already battling rising raw material and logistics costs. Leading players like Superhouse and Mirza International, which earn nearly 30% of their revenue from the US, now face risks as reduced price competitiveness threatens their earnings.

Sectors Less Affected

The following are the Sectors Exempted from Tariffs

Broader Economic and Strategic Impact

These tariffs threaten to make many exports to the US commercially unviable, triggering job losses and slower economic growth in India, which is otherwise one of the fastest-growing major global economies. The move is seen as a strategic shock that disrupts India’s long-standing role in the global industrial value chain and weakens export hubs, especially those dependent on US contracts.