US-India trade tension hangs over Indian capital markets

Indian equity markets could come under pressure over the fresh tension between the US and India over trade as India retaliated with tariffs on 29 American products.

This decision followed the US ending India’s $5.6 billion trade concessions under the Generalised System of Preferences (GSP) programme.

Last year, the US imposed duties on steel and aluminium from India following which a retaliation was deferred until now.

Several analysts have said investors sentiments would be impacted.

“Tariffs to the tune of $400-450 million from all bilateral trade of 142 billion dollar with the US — this shows that the impact is insignificant,” said Ajay Sahai is the Director General and CEO of the Federation of Indian Export Organisations (FIEO). The US-China trade war has long troubled the global financial markets. The damage was such that the global growth took a beating, as noted the International Monetary Fund (IMF).