US stock market crash: Can India weather the Trump storm?

Global markets are in turmoil as US President Donald Trump’s unpredictable trade policies send shockwaves worldwide. With $4 trillion wiped out from US markets, investors are in a frenzy. The ripple effects are being felt in India as well, raising concerns about the economy's stability. Can India insulate itself from Trump’s tariff storm? Capital Beat dives deep into the economic and political implications of Trump’s trade war with a distinguished panel of experts. Panelists include Sanjay Kapoor, an international affairs expert and veteran journalist; Dr Aftab Kamal Pasha, an international affairs expert and former diplomat, and TK Arun, a veteran business journalist.

Trump’s tariff war triggers global panic

The US stock market has suffered a historic loss, with $4 trillion wiped out due to Trump’s tariffs on Mexico, Canada, and China. The impact extends beyond Wall Street, raising concerns for global markets, including India. US bond yields have dropped, signaling investor fears of an impending economic slowdown.

Also read: Indian markets fall in early trade as US stocks tumble towards their worst day in years

Trump’s assertion that the US economy is in a transition phase has only added to the uncertainty. His administration’s back-and-forth decisions—announcing and then delaying tariffs—have left global markets and businesses struggling to anticipate what comes next.

A stabilising factor or a deeper crisis?

Veteran journalist TK Arun suggests that while Trump’s policies appear disruptive, they might ironically act as a stabilising factor. He argues that Trump is highly market-sensitive, and a strong negative market reaction could force him to adjust his policies.

"Trump has announced tariffs and then suspended them multiple times. Many believe these are simply bargaining tactics to force other nations into concessions," Arun explains. He adds that international backlash—particularly Canada’s retaliatory tariffs on US electricity exports—is making American businesses rethink their stance on Trump’s economic measures.

India’s response: Panic or strategic delay?

The Indian government appears divided on how to handle the US trade dispute. Commerce Secretary Sunil Bhartwal recently informed a parliamentary panel that India has not committed to any tariff reductions, contradicting Trump’s claims that India has agreed to lower tariffs.

According to Dr Aftab Kamal Pasha, this mixed messaging suggests either that one side is not being truthful, or that India is deliberately buying time. He warns that India must avoid over-reliance on the US market and focus on strengthening trade ties with BRICS nations (Brazil, Russia, India, China, and South Africa).

"Unlike India, China has learned from past trade wars and is better prepared. We must stop acting like a subordinate nation and instead focus on economic self-reliance," Dr. Pasha argues. He suggests diversifying India’s trade partnerships to lessen dependence on the US market.

Also read: On tariff, Trump taunts India: ‘Somebody is finally exposing them…’

Is India surrendering to US pressure?

International affairs expert Sanjay Kapoor raises concerns about India’s cautious approach to Trump’s aggressive trade policies. He points out that India’s economic risk is only around $7 billion, a small fraction of the country’s $150 billion trade with the US.

"So why is India behaving like it's under siege?" Kapoor questions. He suggests that New Delhi’s soft stance on Trump is politically motivated. By aligning with Trump’s global strategy, India may hope to gain geopolitical leverage against China while maintaining strong US relations.

However, Kapoor warns that this could be a double-edged sword. Trump’s policies are unpredictable, and relying on him for long-term stability could backfire. He advises that India must assert its independence while strategically navigating US demands.

The real impact: Should India worry?

Finance Minister Nirmala Sitharaman has publicly stated that the US trade war will affect India’s economy. However, TK Arun believes that India is handling the situation wisely, avoiding harsh stances while keeping its options open.

"India is not in a surrender mode. It is negotiating carefully, avoiding immediate commitments that could harm its economy in the long run," Arun argues.

While Trump’s tariff war disrupts global markets, India’s real challenge is ensuring it does not become overly dependent on US trade while strengthening its domestic economy.

Also read: China on Trump's tariffs: 'If US wants war, ready to fight till the end'

What should India do next?

Strengthen regional trade – India must deepen trade ties with BRICS nations and ASEAN to reduce US dependence.

Encourage domestic growth – More focus on self-reliance and manufacturing can insulate India from trade disruptions.

Use diplomatic leverage – Instead of bending to Trump’s tactics, India must strategically negotiate trade deals that benefit its long-term interests.

With global markets in turmoil, India’s next moves will determine whether it emerges stronger or more vulnerable in the face of Trump’s erratic policies.

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