Indian equity benchmarks moved decisively lower on Thursday, positioning themselves for the steepest single-session decline in more than four months, as renewed concerns over United States trade policy weighed heavily on investor sentiment. The sell-off was driven by escalating warnings from United States President Donald Trump regarding higher tariffs on Indian exports, particularly in the context of India’s continued purchases of Russian crude oil.
By early afternoon trade in Mumbai, the Nifty 50 index had declined close to one percent to 25,884.15, while the Sensex was trading nearly 0.9 percent lower at 84,207.45. Both indices were on course to record their sharpest daily fall since August 26, 2025, reflecting a broad-based risk aversion across domestic markets.
Sectoral performance underscored the depth of the decline. All sixteen major sector indices were in negative territory. Mid-cap and small-cap stocks witnessed sharper pressure, each losing about 1.8 percent, as investors moved away from riskier assets amid rising geopolitical and trade-related uncertainty.
Market anxiety intensified following confirmation that a bipartisan bill in the United States Congress proposes punitive tariffs of up to 500 percent on countries continuing to import Russian oil. The proposal has received public backing from President Trump and is awaiting legislative approval. The United States has already imposed tariffs reaching 50 percent on certain Indian goods, with half of these measures directly linked to India crude oil imports from Russia. India currently ranks as the world second largest buyer of Russian crude, after China.
Foreign portfolio investors have reacted swiftly to these developments. January has already witnessed equity outflows of approximately 694 million dollars, extending the record foreign selling seen throughout 2025 and placing additional pressure on domestic valuations.
Among sectoral losers, metal stocks fell over three percent as the global commodities rally showed signs of fatigue after recent highs. Oil and gas shares declined nearly 2.8 percent as investors evaluated the implications of Washington move to import Venezuelan crude, potentially increasing global supply. Information technology stocks also retreated, giving up recent gains amid concerns over external demand.
Despite the sharp correction, market participants note that prospects of a favourable India United States trade agreement, stable corporate earnings and forthcoming Union Budget measures could provide a basis for recovery once policy clarity emerges.