Trump’s 50% tariffs As of August 28, 2025, the Nifty 50 and Sensex have both experienced a decline. The primary reason for this market downturn appears to be a new round of tariffs imposed by the U.S. on Indian goods. This negative sentiment is further exacerbated by ongoing foreign institutional investor selling of Indian equities.
Here’s a breakdown of the key factors contributing to the market’s performance today:
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- U.S. Tariffs: The U.S. has implemented an additional 25% tariff on Indian exports, bringing the total tariff to 50% on certain goods. This has created a negative sentiment in the market, as it is expected to impact Indian exporters and affect near-term economic prospects.
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- Foreign Institutional Investor (FII) Selling: Foreign investors have continued to sell off Indian equities, a trend that has been ongoing for some time. While Domestic Institutional Investors (DIIs) are stepping in to buy, the sustained FII outflows are putting downward pressure on the market.
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- Profit Booking: After a recent rally, investors are engaging in profit-booking, particularly in sectors that had seen strong gains, such as financials and IT.
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- Weak Rupee: The Indian rupee has been depreciating against the U.S. dollar, which can make imports more expensive and squeeze corporate profit margins, further contributing to the negative sentiment.
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- Global Market Cues: The Indian market’s decline is also in line with some global market trends, with other Asian markets trading lower amidst various international economic concerns.