NextFin news, New Delhi, this Wednesday — Indian stock markets have delivered positive returns in 2025 despite the imposition of various US tariffs by former President Donald Trump, according to a report released by Bank of Baroda (BoB) on Wednesday.
The report highlighted that strong domestic fundamentals, robust domestic consumption, and the implementation of GST 2.0 reforms have played a key role in cushioning Indian equity markets from the adverse effects of external economic pressures, including the US tariffs announced from January to mid-September 2025.
BoB economist Sonal Badhan noted that while many global markets experienced volatility and losses in the initial months of 2025 due to tariff announcements, Indian markets, along with those of Hong Kong, Brazil, and China, managed to deliver positive returns during the January to April period. The S&P 500 and Dow Jones indices in the US recorded losses wiping out $6.1 trillion in market value during the same period.
From April to mid-September, global markets rebounded following a 90-day tariff pause announced in April and new trade agreements between the US and countries including the UK, Japan, Indonesia, and Vietnam. Indian markets benefited from this recovery, supported by domestic policies and reforms.
The Bank of Baroda report also emphasized the role of front-loaded rate cuts by the Reserve Bank of India (RBI) in supporting growth and cushioning the equity markets from external shocks.
Market capitalization of the Indian Sensex grew by $66.5 billion in 2025 despite the US tariffs on Indian imports. Domestic mutual fund inflows have also helped shield Indian equities from declines caused by persistent selling by foreign portfolio investors, with August marking the 25th consecutive month of net inflows from domestic investors.
Christopher Wood, global head of equity strategy at Jefferies, stated on Tuesday that domestic mutual fund inflows have prevented Indian equities from falling by 20-30 percent this year amid foreign selling pressure.
Other emerging markets such as Vietnam, Japan, Indonesia, Hong Kong, China, and the UK posted double-digit growth in the same period, supported by trade agreements and easing tariff tensions.
The report underscores that India’s large domestic market and ongoing GST reforms provide a buffer against global shocks, helping maintain investor confidence despite geopolitical and trade uncertainties.
These findings were published on this Wednesday by Bank of Baroda and reported by Fortune India and Ommcom News.
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