The 90-day tariff pause announced by President Trump has significant implications for global trade and markets:

• A baseline 10% tariff remains in place for all countries, including India, while higher reciprocal tariffs are suspended for 90 days12

• China is excluded from the pause, with tariffs on Chinese imports increased to 125%2

• The move triggered a major stock market rally, with the S&P 500 surging 9.5% and the Nasdaq jumping 12%3

• Indian markets are expected to open strongly, with the GIFT Nifty indicating a potential 2.5% gain4

However, uncertainty persists regarding what will happen after the 90-day period, and the ongoing U.S.-China trade tensions continue to impact global markets56. Analysts caution that volatility may continue as countries negotiate with the Trump administration and the effects of the baseline tariff play out across industries73.

India's export-oriented sectors are poised for growth amid changing global trade dynamics. Key industries with high export potential include:

• Electronics and telecom products, projected to see a 12% increase in exports despite tariffs1

• Pharmaceuticals, which remain exempt from additional US tariffs and account for 54% of India's $12 billion annual exports to the US2

• Textiles, expected to gain a competitive edge due to tariff exemptions compared to other countries1

• Chemicals, benefiting from a diverse product portfolio and strong R&D focus3

• Agricultural products, particularly organic and value-added goods gaining traction internationally3

These sectors are supported by government initiatives like the Make in India program and strategic trade agreements, positioning India to capitalize on shifting global supply chains and expand its export market share45.

The Indian stock market staged a strong recovery following the initial shock of Trump's tariff announcement. The NSE Nifty 50 Index rose by as much as 1.3%, marking its longest streak of gains since September of the previous year1. This rebound was driven by several factors:

• Renewed investor confidence due to early signs of increased government spending and a more accommodative monetary policy1

• Bargain hunting and positive cues from Asian markets amid hopes for US tariff negotiations2

• A sharp decline in India VIX, the market's fear gauge, indicating reduced investor anxiety3

• Broad-based gains across all 13 major Indian sectoral indices, with small-cap and mid-cap indices also rising2

The recovery demonstrates the resilience of the Indian market, with analysts noting that India's economy is primarily driven by local demand and faces comparatively lower reciprocal tariffs4. However, caution remains as underlying tensions and uncertainties persist in global trade dynamics5.