Who to solve – Trump or Bihar!

Amid US President Donald Trump’s 50 percent tariff assault, most Indians ignored the severe slide in the stock market since April 7, repeated with Operation Sindoor on May 7, and peaking on August 8 for unimpressive earnings, stretched valuations and large foreign capital (FPI) outflows in between April and early August.
The Sensex has been in a bear hug for the last six consecutive weeks for Trumpism, political slugfest amid Parliament logjam over Bihar electoral rolls special intensive revision and not so bright statistics on core and manufacturing.
Share market is shaken by Trump blows to putting off talks until the tariff dispute is resolved. It is rocking the stock market amid uncertainties over imports, exports and domestic production and tough Indian stance at talks with the US negotiators.
On Friday, August 8, equity benchmark Sensex crashed 847 points, or 1.05 per cent, to hit an intraday low of 79,775.84. The NSE counterpart Nifty 50 also dropped by 1.05 per cent to hit the day’s low of 24,337.50. Broader markets underperformed. The BSE Midcap index lost 1.56 per cent, while the Smallcap index lost 1.03 per cent.
The overall market capitalisation of BSE-listed firms dropped to Rs 440 lakh crore from Rs 445 lakh crore in the previous session. Thus, the massive across-segments sell-off made investors poorer by about Rs 5 lakh crore in a single session, as per market estimates
SpiceJet, Tejas Networks, Quess Corp, Route Mobile, and Protean eGov Technologies, were among the 110 stocks that hit their 52-week lows on the BSE.
Foreign investors put in Rs 14,590 crore in the country’s equity market in June, marking the third straight month of investment, supported by improving global liquidity conditions, easing geopolitical tensions, and a rate cut by the Reserve Bank of India. However, foreign portfolio investors (FPIs) turned net sellers in July and pulled out Rs 1,421 crore, in the first week of July itself, data with the depositories showed.
FPIs made a total outflow of Rs 17,741 crore in the whole of July, marking a shift after three consecutive months of inflows during April, May, and June, according to data released by National Securities Depository Limited (NSDL).
Since the U.S. tariff announcement on April 2, the total market value of all NSE-listed companies has fallen by $280 billion – 24.5 lakh crore on April 7 when Sensex crashed 765 points, investors lost Rs 5 lakh crore in a day. It was one of the second worst day since February 28, 2025, when the Indian stocks had the worst run in 29 years, since 1996, wiping $ 1 trillion in wealth. This was termed India’s worst performing global market. The pain lingers ever since.
“In the current scenario of U.S. tariff uncertainty, Indian markets will struggle a bit more,” says Mahesh Patil, chief investment officer at Aditya Birla Sun Life Asset Management Company.
Data from the NSDL suggests foreign portfolio investors (FPIs) sold equities worth Rs 1.12 lakh crore in February, and outflows continued at Rs 30,015 crore in March. The trend has persisted since last year. With the tariff wars, this situation has aggravated further.
Farm Protests & Stocks
Though now it is being mostly attributed to Trump actions, it is much more.
India considering serious domestic fall outs in the political turf refuses to budge on two key US demands – free farm goods and dairy product inflow into India. It has taken a firm stand of disallowing genetically modified food products. The farm protests against allowing US imports have led the government to refuse more. India is generally considered to have done the right by not opening its agri markets to US grains, fruit, dairy and fish.
Agriculture sustains about 54 percent of India’s population and at least 46 percent of employees. But farming household earnings are poor at Rs 13661 per month, on average. Agricultural farm income is just Rs 4476. The rest is oncome from other work. It would be imprudent to throw small farmers against highly mechanised farms of America. Prime Minister Narendra Modi rightly says. “For us, our farmers’ welfare is supreme”.
With most volatile Bihar elections ahead, India with such a high population dependent on the farms cannot ignore their necessities and need for protection. Though there are arguments against protectionism. But with farm input cost rising, inflation going beyond actual earnings from most major crops, despite continuous increase in minimum support prices is rocking the Indian politics and economy, both closely entangled. The high agricultural employments testify that the industry has not been able to wean the workers away as it could neither create jobs, nor offer proper wages nor working conditions. The country needs an intense discussion on how working conditions could increase. Hire and fire shows a feudal mindset of disregarding the workers’ welfare.
Increased financial market volatility and potential disruptions in manufacturing and supply chains could further impact the economy.
The economic turbulence is tied to a complex US-China-India-Russia dynamic. Possible turning points include a Trump–Vladimir Putin meeting, bilateral India–China or India–Russia summits, or a QUAD gathering hosted by India.
Meanwhile, doubts linger over whether the WTO can be revived or if it is sliding into irrelevance like the League of Nations before WW-II. India’s moral stance in resisting Trump’s tariff terms is clear, but the negotiation endgame remains uncertain.
The answers are as complex. Even the smallest solution could change the tack.
It is a critical phase. India is morally correct in stalling the Trump tariff negotiations. But that cannot be the end.
While India is projected to be a leading global growth engine in 2025, it faces headwinds from a slowing global economy and potential trade disruptions. The country’s ability to manage these challenges and maintain its growth trajectory will be crucial for its long-term economic health.
The silver line is India’s total exports have seen significant growth, particularly in engineering goods, electronics, and pharmaceuticals. And the stocks have managed to come out of worse situations since 1992. That keeps the hope alive amid International Monetary Fund forecast 6.7 percent growth this year and 6.4 percent in 2026.