Stock market indices, Sensex and Nifty, expected to begin with subdued momentum due to Tata Consultancy Services' (TCS) announcement of layoffs.
The U.S.-India trade talks are currently in a stalemate, with no finalized trade agreement between the two countries as of late July 2025. U.S. President Donald Trump announced that the trade deal has not been finalized and indicated that starting August 1, 2025, the U.S. will impose a 25% tariff on Indian goods, along with an additional penalty related to India's purchases of energy and arms from Russia.
Despite previous suggestions that a deal was near, President Trump confirmed that negotiations are still ongoing. The tariff imposition is effective August 1, with no further deadline extensions. Commerce Secretary Howard Lutnick also confirmed the tariff enforcement.
A major sticking point in the negotiations remains agriculture, with India insisting on protecting its farmers and labeling agricultural tariff concessions as a ‘red line’. The U.S., on the other hand, seeks greater market access for its goods in India.
The imposition of tariffs is a cause for concern, particularly in the Indian pharmaceutical sector, which is a significant U.S. generic drug supplier. There is also concern about the potential impact on U.S. drug supply and affordability.
While no deal is finalized, negotiations continue, with India expecting a U.S. delegation in mid-August 2025. The critical deadline of August 1 has triggered tariff enactments by the U.S., pending further progress in negotiations.
Meanwhile, the U.S. has finalized a comprehensive trade deal with the European Union, placing a 15% tariff on most EU goods entering the U.S. (previously threatened to be 30%). A team of U.S. government negotiators will visit New Delhi in the second half of August for the next round of trade agreement talks.
Elsewhere, Asian markets are mostly higher this morning, with the exception of Japan's Nikkei, which is trading lower due to disputes in the U.S. investment and trade deal. The euro strengthened, while the dollar slipped.
In the U.S., U.S. stocks rose on Friday, with the tech-heavy Nasdaq Composite inching up 0.2 percent. The S&P 500 added 0.4 percent, and the narrower Dow gained half a percent. European stocks closed mostly lower on Friday.
Indian shares are expected to open cautiously on Monday, with IT stocks potentially being a focus due to TCS's planned workforce reduction. There is also the possibility of foreign fund outflows and fears over the August 1 U.S. tariff deadline impacting markets as the session progresses. Gold held near a two-week low. Oil edged up slightly.
Media reports suggest that the U.S. and China may extend their tariff truce for three months as talks commence in Stockholm. The U.S. President Trump has also stated that there is a 50-50 chance of making a trade deal with the EU. Commerce and industry minister Piyush Goyal stated that India-U.S. trade talks are making 'fast progress', with a goal to finalize the first tranche of the agreement by fall (September-October).
- The U.S.-India trade talks, amid ongoing disagreements on agricultural tariff concessions and market access for goods, have prompted concerns in the Indian pharmaceutical sector, which could potentially impact U.S. drug supply and affordability.
- Despite the ongoing trade dispute between the U.S. and India, there is optimism, as Indian Commerce and Industry Minister, Piyush Goyal, emphasizes that negotiations are progressing rapidly, aiming to finalize the first tranche of the agreement by fall (September-October).
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