Investors are expected to closely monitor international trade developments after U.S. President Donald Trump announced a nearly 50% tariff on Indian imports.
The move, which marks a significant escalation in trade tensions between the two countries, has raised concerns over retaliatory measures from India and potential disruptions across sectors such as pharmaceuticals, textiles, and IT services.
This development comes at a time when foreign institutional investors (FIIs) have been persistently pulling out funds from Indian equities, contributing to near-term pressure on market sentiment. The trend mirrors cautious positioning across emerging markets, driven by fears of a global economic slowdown, tighter U.S. trade policy, and shifting risk appetite.
With FIIs exiting, domestic institutional investors (DIIs) have stepped in as stabilizers, absorbing part of the selling pressure — but concerns remain over whether this support will hold if outflows accelerate.
It is possible that trade-sensitive sectors may continue to underperform in the near term, while domestic demand-driven segments like FMCG and infrastructure could offer relative resilience. The broader outlook will depend on India’s diplomatic response, clarity on potential exemptions or trade talks, and how other major economies position themselves in response to evolving U.S. trade policy.
A slew of economic indicators is lined up for release next week, which could set the tone for markets globally. While the Q1 corporate earnings season enters its final leg, investor attention is expected to shift toward key macroeconomic releases — particularly inflation and trade data from major economies including the U.S., China, and India.
These data points will be closely scrutinized for signals on central bank policy direction, especially in light of growing concerns around global growth moderation. Any upside surprises in inflation could delay rate-cut expectations, while soft trade figures may reinforce worries about slowing demand.
On the quarterly results front, key firms scheduled to announce their Q1 earnings next week include Olectra Greentech, Astral, SJVN, Oil and Natural Gas Corporation (ONGC), Hindalco Industries, Apollo Hospitals Enterprise, Oil India, PI Industries, Bharat Petroleum Corporation Ltd (BPCL), Max Healthcare, Muthoot Finance, Samvardhana Motherson, IRCTC, Jubilant FoodWorks, Indian Oil Corporation (IOC), Ashok Leyland, and Patanjali Foods.
India:
The consumer price inflation rate for the month of July will be unveiled on August 12. India’s consumer price inflation eased for the eighth straight month, falling to 2.1% in June 2025 — the lowest level since January 2019 — down from 2.82% in May.
The wholesale price inflation figure for July 2025 will be made public on August 14. India’s wholesale prices unexpectedly fell by 0.13% year-on-year in June 2025, reversing from 0.39% growth in May. This marked the first annual decline in wholesale prices since October 2023.
Passenger vehicle sales data for July 2025 will be released on August 15. Total passenger vehicle sales in India dropped by 6.3% year-on-year to a six-month low of 275,766 units in June 2025, reversing a 0.8% rise in the previous month, according to data from the Society of Indian Automobile Manufacturers (SIAM).
India’s balance of trade position will be announced on August 15. India recorded a trade deficit of $18.8 billion in June 2025, narrowing from the \$21 billion gap in the corresponding period of the previous year. This halted a streak of three consecutive months of widening trade deficits. Imports contracted by 4% from the previous year to $53.9 billion, while exports remained mostly unchanged at \$34.1 billion.
China:
China’s inflation rate for the month of July 2025 will be released on August 9. Consumer prices rose by 0.1% year-on-year in June 2025, reversing a 0.1% drop in each of the previous three months. This marked the first annual increase in consumer inflation since January, driven by e-commerce shopping events, increased subsidies for consumer goods from Beijing, and easing trade risks with the U.S.
China's industrial production data for July will be made public on August 15. Industrial production grew by 6.8% year-on-year in June 2025, accelerating from May’s six-month low of a 5.8% increase. This marked the fastest growth since March, supported by a series of government measures to boost the economy.
United States of America:
The U.S. inflation rate for July 2025 will be made public on August 12. The annual inflation rate in the U.S. accelerated for the second consecutive month to 2.7% in June 2025 — the highest level since February. Annual core inflation rose to 2.9% from 2.8%, though it remained below the forecasted 3%.
Data on changes in the API crude oil stock will be released on August 13. According to the American Petroleum Institute (API), U.S. crude oil inventories fell by 4.2 million barrels in the week ending August 1, 2025, reversing the prior week’s 1.539 million-barrel build.
U.S. retail sales for July 2025 will be announced on August 15. Retail sales in the U.S. increased 0.6% month-over-month in June 2025, after declines in the prior two months. Meanwhile, sales excluding food services, auto dealers, building materials stores, and gasoline stations — which are used to calculate GDP — were up 0.5%, following a downwardly revised 0.2% increase.
The preliminary value for the Michigan Consumer Sentiment Index for August 2025 will be made public on August 15. The University of Michigan’s consumer sentiment index for the U.S. came in at 61.7 in July 2025, largely unchanged from the preliminary reading of 61.8. This marked the second consecutive monthly increase, pushing sentiment to its highest level since February 2025.