As 'Trumpcession' looms, India heads for more volatility, uncertainty

Sensex and Nifty, traded lower on Tuesday, following a widespread sell-off in Asian markets after Wall Street dropped overnight due to recession concerns in the US. The rupee is likely to stay under pressure on Tuesday, as concerns over a potential recession sapped risk appetite across financial markets, driving most Asian currencies lower.

US President Donald Trump's plan to impose tariffs on India have already raised volatility in markets as Trump has emphasised his tariff threats against India. His reciprocal tariffs on other countries are set to come into effect from April 2.

India has a large tariff gap with the US with the Indian rate on US goods at 9.5% compared to 3% in the US, which means India is vulnerable to economic shocks from reciprocal tariffs.

With economists predicting a recession in the US due to Trump's tariff policies, 'Trumpcession', as it is being termed, will only add to global uncertainties for India's economy and markets when tariff threats are already hurting sentiment.

What are the odds of a Trumpcession?
Within months, sentiment has soured in the US from hopes of Trump ploughing money into the economy to a Trumpcession taking shape. Trump's tariffs have spooked investors, with fears of an economic downturn driving a stock market sell-off that has wiped out $4 trillion from the S&P 500's peak last month, when Wall Street was cheering much of Trump's agenda.

A barrage of new Trump policies has increased uncertainty for businesses, consumers and investors, notably back-and-forth tariff moves against major trading partners like Canada, Mexico and China.

«I hate to predict things like that,» Trump told a Fox News interviewer when asked if a recession was coming in 2025. «There is a period of