New Delhi: In a diplomatic boost for India, the European Union (EU) has rejected US President Donald Trump’s proposal to impose a 100% tariff on Indian goods as punishment for New Delhi’s purchase of Russian oil. Analysts say the decision reassures markets that India continues to be viewed as a key strategic ally by Europe.
Following the news, the Nifty 50 closed above the 25,000 mark on September 11, with a modest gain of 32 points (0.13%). Experts believe this development will support investor sentiment in the near term.
Trump had urged the EU to impose steep tariffs on Indian and Chinese imports to pressure Russia. However, the EU’s refusal highlights its independent stance and ongoing efforts to strengthen ties with India, particularly through the India-EU Free Trade Agreement (FTA), whose 13th round of talks began on September 8. European Trade Commissioner Maros Sefcovic is set to visit India on September 12 to review progress alongside Union Minister Piyush Goyal.
Analysts’ Views
- Seema Srivastava (SMC Global Securities): “India’s trade surplus with the EU is expanding, reflecting demand for Indian exports. With an FTA expected by year-end, Indian companies with strong export bases look attractive for long-term investors.”
- Prashanth Tapse (Mehta Equities): “The EU rejecting Trump’s plan was expected. It shows Europe is not aligning blindly with Trump’s agenda. While the news is positive, markets will still look to earnings growth for momentum.”
- VK Vijayakumar (Geojit Investments): “This is positive for India, alongside other tailwinds like tax cuts, policy stimulus, and GST reforms. We expect a rebound in corporate earnings from Q3 onwards.”
Economic Outlook
Fitch Ratings recently raised India’s growth forecast for FY26 to 6.9%, citing strong services momentum and robust consumer and government spending. Analysts expect this supportive macroeconomic backdrop, coupled with global confidence in India’s trade positioning, to keep markets steady and attract foreign investment.
