On April 2, 2025, U.S. President Donald Trump imposed a sweeping 27 percent tariff on all imports from India, reviving his “America First” trade agenda. Within days, China retaliated with a 34 percent tariff on U.S. goods and imposed restrictions on rare earth exports. So how did the world react to Trump Tariffs 2025?

Well, markets around the world plunged in response. Yet amid the global volatility, India’s benchmark index, the Sensex, showed notable resilience, falling only 4.1 percent while global peers dropped by much more.

This article builds on our in-depth analysis of the 2025 Trump Tariffs and their sectoral impact. Now, we take a closer look at how the situation has evolved, how Indian equities are responding, and why this could be a critical time for SIP investors to stay the course.

Global Stock Markets React to Tariff Shock

China’s Countermeasures Escalate Trade Tensions post Trump Tariffs 2025

Following Trump’s tariff announcement, China quickly responded with a 34 percent duty on U.S. imports starting April 10. It also moved to restrict rare earth exports, signaling a prolonged trade conflict.

This reignited fears of a broader global trade war. Risk-off sentiment swept through global equities, with sharp sell-offs across major indices:

• Hong Kong: -13.2%

• S&P 500: -10.5%

• Nikkei 225: -10.4%

• DAX: -10.1%

• Taiwan: -9.7%

• CAC: -9.3%

• FTSE 100: -7.0%

• CSI 300: -6.4%

• KOPSI: -6.4%

• Sensex: -4.1%

Despite being directly affected by U.S. tariffs, India’s equity market outperformed global counterparts by a wide margin.

Why Indian Equities Are More Resilient

Domestic Demand Anchors India’s Economy

India is relatively insulated from global trade shocks due to its domestic demand-driven economy. Unlike China or Vietnam, India is not heavily reliant on exports to drive GDP growth.

Macroeconomic indicators remain strong:

• GDP growth (FY 2025–26): 6.5% (IMF estimate)

• Inflation (as of February 2025): 3.6%

• Fiscal deficit: 4.8%, within budget targets

This strong foundation has helped India weather global volatility more effectively.

Policy Clarity and Market Confidence

There has been no sign of emergency intervention from the Indian government or the Reserve Bank of India. This policy steadiness reinforces market confidence and demonstrates that the country’s financial health remains intact.

India has also shown willingness to de-escalate trade tensions, having lowered tariffs on U.S. imports and proposed increased energy purchases.

Favorable Position in the Global Trade Realignment

As the U.S. increases tariffs on multiple countries—Vietnam (46%), Bangladesh (37%), China (34%)—India is relatively less penalized at 26%. This gives Indian exporters a competitive edge in select global supply chains, potentially capturing market share in categories such as textiles, electronics, and engineering goods.

Should You Stop Your SIPs Amid the Volatility?

The Role of SIPs in Volatile Markets

Systematic Investment Plans (SIPs) are specifically designed for market cycles like this. Instead of trying to time the market, SIPs allow investors to average their investment cost over time.

Pausing SIPs during market dips is often counterproductive. Lower stock prices mean SIP investors accumulate more units for the same monthly investment, improving long-term returns.

This Is a Time to Accumulate, Not Withdraw

Despite the negative headlines, the Sensex and Nifty have shown more strength than global indices. This is not a moment of weakness, it is an opportunity.

Historically, markets that remain resilient during global shocks tend to attract increased foreign and domestic capital. By staying invested or even increasing contributions during market corrections, investors can benefit from future rebounds.

A Five-Point SIP Strategy for 2025

1. Continue Your Existing SIPs
   Stay disciplined. SIPs are structured to reward consistency, especially during volatile periods.

2. Increase Allocations During Market Dips
   If you have surplus capital, consider stepping up investments while valuations are attractive.

3. Diversify Your Portfolio
   Balance exposure across large, mid, and small-cap funds. Include sectoral variety to spread risk.

4. Avoid Knee-Jerk Reactions
   Don’t let headlines dictate investment behavior. Stick to your strategy and time horizon.

5. Consult an Experienced Advisor
   A professional can help you assess sector exposure and rebalance your portfolio if needed.

Moving Forward: Considerations for Investors

Volatility in the equity markets is not new. What often matters more than timing the market is having a consistent and well-structured investment process. Investors may consider the following:

• Maintain discipline and avoid reactive decision-making

• Review asset allocation periodically to stay aligned with long-term goals

• Consult a financial professional for portfolio-specific guidance

• Stay updated on global developments without making investment decisions based solely on headlines

Final Thoughts

The developments around tariffs and global trade policy have created uncertainty, but India’s economy and markets have shown relative resilience so far. Investors following systematic strategies may find that short-term volatility does not necessarily disrupt long-term plans, provided they stay focused and informed.