Trump's Tariff For India, Deal For Pakistan: Sensex, Nifty Down; Karachi KSE 100 Surges

India’s equity markets came under pressure on July 31 after US President Donald Trump announced 25 per cent tariffs on goods imported from India, plus “penalty” for maintaining trade relations with Russia, especially for buying oil and military equipment.

This announcement rattled investor sentiment on the Dalal Street, triggering a broad-based sell-off across almost all segments of the market.

The Sensex fell as much as 786.71 points, or 0.96 per cent, to its intraday low of 80,695.15. Similarly, Nifty 50 plunged up to 220.05 points, or 0.88 per cent to intraday low of 24,635.00.

Broader market indices such as Nifty Midcap 100, Nifty Smallcap 100, and Nifty 500 also fell in the range 1-1.5 per cent. Sectorally, nearly all major indices plunged to trade in red, barring FMCG.

Meanwhile, Pakistan’s stock market rallied after Trump announced that US will be lending support to Pakistan in developing their “massive” oil reserves. Pakistan Stock Exchange’s (PSX) primary benchmark index KSE 100 rallied as much as 1,800 points, or 1.30 per cent to 1,40,215.22. KSE 100 tracks top 100 most valued and liquid companies listed on PSX and represents about 80-85 per cent of total free-float market cap of PSX. 

Here’s What Trump Announced For India And Pakistan

In a dramatic shift in global trade policies, Trump announced two major decisions involving India and Pakistan. The announcements have already stirred the markets, and left investors waiting to see how these policy changes could reshape trade relations and economic ties going forward.

25% Tariffs For India

Late on July 30, Trump announced via his social media platform Truth Social that US will impose a 25 per cent tariff on Indian goods starting August 1 and an additional penalty for maintaining trade relations with Russia. Trump said that while the US considers India a friend, “we have, over the years, done relatively little business with them (India) because their tariffs are far too high, among the highest in the world, and they have the most strenuous and obnoxious non-monetary trade barriers of any country.”

He also criticised India’s trade relations with Russia, saying, “They (India) have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of energy, along with China, at a time when everyone wants Russia to stop the killing in Ukraine — all things not good!”

Partnership With Pakistan To Develop Oil Reserves

Early on July 31, in a separate post, Trump said the US had “just concluded a deal with the country of Pakistan,” under which both nations would work together to develop Pakistan’s “massive oil reserves.”

Pakistan buys most of its oil from the Middle East to meet its energy demand. Media reports suggest that Pakistan has large offshore oil reserves that are largely untapped as it lacks the technology and funds to explore them.

Trump didn’t mention any specific oil reserves or which oil exploration company the US is planning to partner with. He said the process of selecting an oil company to lead the partnership is underway, and even took a jibe at India, saying, "Who knows, maybe they’ll be selling oil to India some day!”

Pakistan’s Prime Minister Shehbaz Sherif took to X (formerly Twitter) to thank Trump for his “leadership” in what he called a “historic US-Pakistan trade agreement.”

He said, “I wish to convey my profound thanks to President Trump @realDonaldTrump for his leadership role in finalization of the historic US-Pakistan trade agreement, successfully concluded by our two sides in Washington, last night.”

“This landmark deal will enhance our growing cooperation so as to expand the frontiers of our enduring partnership in days to come,” he added.

What Is There In Trade Deal With Pakistan

Trump has not yet specifically mentioned any tariff agreement with Pakistan. However, Pakistan's Ministry of Finance said earlier today that it would lead to "reduction of reciprocal tariffs, especially on Pakistani exports to the United States", as reported by Reuters.

The neighbouring country finance ministry, however, didn’t reveal any figures on how much tariff US is imposing on them.

"This deal marks the beginning of a new era of economic collaboration especially in energy, mines and minerals, IT, cryptocurrency and other sectors," Pakistan’s finance ministry said, as reported by Reuters.

Pakistan was initially facing a proposed 29 per cent tariff announced in April, but its implementation was put on hold for 90 days to allow room for trade negotiations.