US Hikes Tariffs on India Amid Interest Rate Freeze
The U.S. has increased tariffs on Indian goods to penalize India's Russian oil purchases, impacting exports. The RBI maintained interest rates amidst global uncertainty and recent economic policies. Meanwhile, stocks dipped, the rupee slightly recovered, and gold prices rose in response to market dynamics.
- Country:
- India
In a major development, U.S. President Donald Trump has heightened tariffs on Indian imports to 50%, targeting India's continued acquisition of Russian oil. This decision is expected to adversely affect several Indian export sectors, including textiles, marine, and leather goods. The geopolitical move underscores growing tensions as nations navigate complex international relations and trade dependencies.
Despite the escalating tariff situation, the Reserve Bank of India (RBI) chose to keep interest rates steady. Governor Sanjay Malhotra cited global uncertainties and an uptick in core inflation as key factors in maintaining the status quo. This decision underscores a cautious approach amid the uncertainty stemming from new U.S. trade policies and the potential transmission effects of past rate cuts.
The stock market reacted to these developments, with the BSE Sensex falling by 160 points due to a sell-off in IT and healthcare shares. Meanwhile, the rupee experienced a modest recovery, rising 15 paise against the U.S. dollar. In precious metals, gold prices saw an upward movement, with a Rs 200 increase, driven by consistent demand from stockists.
(With inputs from agencies.)
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