Impact of Trump’s Tariffs on India’s Key Sectors: Auto, IT, and Pharma

Market Performance

On April 2, U.S. President Donald Trump introduced broad reciprocal tariffs on trade partners, affecting multiple sectors globally. The announcement led to a decline in the Dow Jones Futures by over 1.5% and triggered volatility across international stock markets. The new tariff structure includes a 26% reciprocal tariff on India and a 25% tariff on automobile imports into the U.S.

Impact on Key Sectors

Automotive Sector

Tata Motors, which exports vehicles to the U.S., remains under scrutiny following the tariff announcement. Additionally, leading U.S. automakers saw a decline in their stock prices, with General Motors falling by over 7%, Ford decreasing by 4.6%, and Stellantis dropping by 4%. Japanese automakers, including Nissan, Toyota, and Honda, recorded declines ranging from 2.2% to 3%, while South Korean companies Hyundai Motor and Kia fell by approximately 4%.

Information Technology Sector

The IT sector, which has substantial exports to the U.S., is also expected to be affected by the tariffs. Companies such as Tata Consultancy Services (TCS) and Infosys are closely watched as the U.S. government considers imposing tariffs on IT services. Any such action could have significant implications for India's technology sector.

Pharmaceutical Sector

The pharmaceutical industry is another sector that may experience the impact of the tariffs. Sun Pharma and Lupin will likely be affected, as the U.S. remains a key market for Indian pharmaceutical exports. Higher tariffs could lead to a decline in export revenues for these companies.

Summary

The newly announced tariffs by the U.S. government introduce significant changes to global trade, particularly affecting India's automotive, IT, and pharmaceutical sectors. The impact on key companies within these industries remains a focal point for investors as markets respond to the evolving trade policies.