Indian equity markets are bracing for an extreme reaction to US President Donald Trump’s reciprocal tariffs made overnight.

The GIFT Nifty, an early indicator of how India’s benchmark indices Sensex and Nifty 50 are likely to start off trade, is indicating a gap down start, currently trading 380 points lower near the mark of 23,000.

This comes after US President Donald Trump announced a 26% tariff on imports from India

. He said the rate was calculated based on cumulative tariffs, including non-monetary barriers, imposed by a country on American goods. By this calculation, Trump said India imposes a 52% tariff on goods from the US.

In response, the Dow futures fell nearly 1,100 points, while the S&P 500 and the Nasdaq futures are down 3.5% and 4.5% respectively. Asian equities are also trading with heavy losses.

Pharma exports have been exempted from the reciprocal tariffs, giving relief to companies such as Sun Pharma, Dr Reddy’s and Aurobindo Pharma, whose revenue from the US comprises 33%, 48.5% and 48.3%, respectively.

Steel, copper, bullion, energy and certain other minerals that aren’t available in the US are also exempt from the latest tariff announcements.

As per an Emkay Global report, dated March 25, a 25% tariff could have a potential impact of $31 billion on India’s GDP. This would amount to around 0.72% of the potential $4.3 trillion GDP India’s likely to have at the end of the calendar year 2025, as per the International Monetary Fund (IMF).

The Nifty 50 ended the previous session in the green after two trade sessions. It ended 166.65 points, or 0.72% higher, at 23,332.35. It has risen 5.48% in the past month.