Indian shares decline as trade worries spur broad selling pressure

Indian shares slipped in broad-based selling on Tuesday after fresh tariff threats from U.S. President Donald Trump reignited global trade uncertainty, outweighing optimism around India–U.S. trade talks and quarterly earnings.

The Nifty 50 fell 0.22% to 25,732.3, while the Sensex shed 0.3% to 83,627.69.

Both benchmarks rose 0.4% on Monday, snapping a five-session losing streak, after Washington’s newly-appointed ambassador to New Delhi said the two countries would discuss trade issues in a call on Tuesday.

“The absence of decisive follow-through buying has kept the broader market outlook guarded,” said Dhupesh Dhameja, derivatives research analyst at SAMCO Securities.

Tariff jitters persisted after Trump warned of an extra 25% tariff on countries doing business with Iran.

India’s bilateral trade with Iran totalled $1.34 billion in the first 10 months of 2025, with key exports including basmati rice, fruits and vegetables, and pharmaceuticals.

“Global trade uncertainty and India-U.S. trade impasse are adding to near-term market nervousness and delaying a normalisation in foreign fund flows,” said analysts led by Bino Pathiparampil of Elara Securities.

Foreign investors offloaded Indian stocks worth $1.72 billion in January so far after a record $19 billion outflow in 2025.

Ten of the 16 major sectors fell. The small-caps rose 0.6% and mid-caps lost 0.2%.

Among stocks, Reliance Industries fell 2.1% after rising 0.5% on Monday. The oil-to-telecom group had dropped 7.4% last week after saying it does not expect any Russian crude deliveries.

Larsen & Toubro fell 3.3% after a report said Kuwait eyed cancelling oil project tenders. L&T, which was the lowest bidder for tenders worth over $4.5 billion, clarified that the projects were not part of its order book.

Online food delivery platform Zomato-parent Eternal gained 3.3% after higher foreign ownership headroom raised expectations of higher weightage in MSCI indexes.