Exporters shares slump on US warning of higher tariffs

Mumbai: Shares of Indian exporters slumped in Thursday's trade as Donald Trump's decision to back a Bill allowing the US to impose 500% tariffs on Indian imports triggered panic. If this Bill is passed, the additional levies would come on top of the existing 50% tariffs on imports imposed last year, raising the overall burden on imports. Shares of textiles, apparel, seafood and drug makers were among the most hit in weak trading on Thursday. Textile exporters Gokaldas Exports, KPR Mill, Vardhman Textiles, and Welspun Living fell 2-8% on Thursday, while shrimp exporters Avanti Feeds, Apex Frozen Foods and Coastal Corporation declined 2-8%. Pharma stocks like Dr Reddy's Laboratories, Torrent Pharmaceuticals and Sun Pharmaceutical, which are currently exempt from tariffs, fell 1-3%.126424942 "There is limited near-term clarity on the potential imposition of additional tariffs by Donald Trump, which has weighed on expectations around a US-India trade deal and may affect trade flows," said Siddhartha Khemka, head of research, at Motilal Oswal Financial Services. The Bill seeks to penalise nations such as India and China, which buy cheaper Russian oil. According to the Sanctioning Russia Act of 2025, the President must increase the rate of duty on all goods and services imported into the United States from countries that knowingly engage in the exchange of Russian-origin uranium and petroleum products to at least 500% relative to the value of such goods and services. The Bill has poured cold water on expectations of a trade deal between New Delhi and Washington, an outcome that was perceived to revive investor sentiment in Indian equities. On April 2, Trump had initially imposed a 26% reciprocal tariff on Indian export, raising it to 50% by the end of August. Since then, Indian stocks have been under pressure on uncertainty over the fallout of the import tariffs on exporters. Khemka said in the near term, retail investors should wait for some clarity before forming a view on export-oriented sectors. "For sectors which are not impacted by tariffs, such as pharmaceuticals and IT, investors can consider buying stocks on decline with a longer term view, once the noise dies down," he said. "But, the best strategy right now would be to focus on domestic facing companies." Amit Khurana, head of equities at Dolat Capital Market advised retail investors to remain cautious on export-oriented sectors amid ongoing volatility and uncertainty. "We would prefer to wait for greater clarity on which sectors may be impacted by tariffs and which could be exempt. In interim, market participants may consider focusing on domestically oriented companies," he said.