As India navigates the second half of 2025, its financial markets are caught in a balancing act—grappling with the global fallout of renewed US protectionism, domestic stimulus expectations, and persistent structural headwinds. The interplay of these forces is reshaping investor sentiment, corporate performance, and policy priorities, with implications that extend far beyond headline GDP figures.The re-emergence of ultra-protectionist trade policies under Trump 2.0 has upended assumptions about India’s strategic insulation. The cumulative tariff burden on Indian exports has surged to 50%, including penalties linked to Russia trade, dismantling the once-popular “TACO” thesis, where India was expected to benefit from softer US trade terms due to geopolitical alignment.
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