Navigating Volatility: India's market jitters on Trade & Geopolitics

Key Highlights

• The strengthening of bilateral economic and defence partnerships with Russia raises concerns from US and European perspectives, adding a layer of complexity to the already delicate trade negotiations with Washington.
• Recent data confirms that the impact of the US's steep 50% tariffs on Indian goods, implemented in late August 2025, has been more severe than initially projected.
• This is significantly impacting India’s external balance sheet: A trade deal with the US, which accounts for one-fifth of India's total exports, is widely seen as a prerequisite to stabilize these external challenges.
• Exports to the US dropped by -9% Year-over-Year (YoY) in October 2025.
• Overall exports were down by -12% for the month due to the combined effect of tariffs and a softer global economic environment.