By Bhushan M 
Trump’s Tariff Threats,Foreign investors have pulled out a staggering $2 billion (₹24,000 crore) from Indian markets in March 2025, marking a significant exodus triggered by Donald Trump’s aggressive tariff stance and domestic economic challenges.
The selloff, which has intensified in recent weeks, reflects growing concerns over Trump’s threatened reciprocal tariffs against India. The former president’s recent statement highlighted the tension(Trump’s Tariff Threats):
India charges us massive tariffs. You can’t even sell anything into India. It’s almost restrictive.
The impact has been particularly severe for American investors, who represent the largest source of Foreign Portfolio Investments (FPIs) in India. US-based FPIs, which held investments worth approximately $400 billion in Indian companies as of September 2024, have seen their portfolio values plummet by about 24% to $34 billion.
- A widespread downgrade in profit projections by major Indian companies
- Over 60% of Nifty50 companies revising their earnings forecasts downward
- The rupee’s depreciation against the dollar, reaching ₹88 per dollar
- Domestic economic slowdown concerns
The market volatility could intensify as April 2nd approaches – the deadline Trump has set for deciding on reciprocal tariffs against India. Goldman Sachs analysts suggest that while the worst may be over for Indian markets, April remains a critical month for investor sentiment.
The current market turbulence highlights the interconnected nature of US-India economic relations. American investors in India face a double impact:
- Direct market losses from the selloff
- Currency depreciation effects on their investments
Experts predict continued market volatility in the coming weeks. The trillion-dollar market value erosion since late 2024 suggests a potentially lengthy recovery period, with much depending on the upcoming tariff decision and its implementation.
Shubhangi M