Black Monday: The new Don of Dalal Street

Trump’s carpet-bombing assault on the global trade order has wreaked havoc on the US’ allies and competitors in equal measure. No place, and no one, is safe anymore.

Financial markets the world over have been slammed by a Category 5 hurricane. And the term ‘Black Monday’ is ricocheting across social media, bringing back ghastly memories of the fateful day of 19 October 1987, when the Dow Jones index plummeted by more than 22% in a single session.

India, too, could not escape the contagion. Benchmark indices Nifty 50 and Sensex nosedived 5% in opening trade on Monday, their biggest fall since the onset of the Covid-19 crisis in March 2020. More than ₹29 trillion of investor wealth has been wiped out since Trump’s ‘Liberation Day’ proclamation of reciprocal tariffs on 2 April.

For context, this is more than India’s estimated net tax receipts of ₹28 trillion for 2025-26.

For domestic investors, the latest storm could not have come at a worse time. Markets have been on a downward trend since October, weighed by frothy valuations, selling by foreign institutional investors, lackluster earnings, and consumption headwinds.

Goldman Sachs sees a 2-3% impact on earnings growth in India over the next couple of years due to Trump’s tariffs. It has lowered its already below-consensus earnings growth forecast for 2025-26 by 2%, and reduced its 12-month target for the Nifty to 25,000 (from 25,500).

On the macroeconomic front, Morgan Stanley expects a downside risk of 30-60 basis points to its India GDP growth estimate of 6.5% for FY26.

Talk about Monday blues.

‘A blessing in disguise’

While sinking into a morass of melancholy might seem to be the appropriate thing to do at this juncture, a bit of perspective might be helpful.

For one, India’s bilateral trade surplus with the US, though growing, is significantly lower than those of several other economies like China and the European Union. New Delhi is already in discussions with Washington for a bilateral trade agreement, which seeks to double the bilateral trade to $500 billion by 2030.

The US’ reciprocal tariffs of 26% on India are lower than those on Asian exporting majors like China (34% + 20% announced earlier), Vietnam (46%), Thailand (36%), Indonesia (32%), which opens a window of opportunity for domestic exporters.

More importantly, Trump’s tariff tantrums might just be the bitter pill Indian mandarins needed to take a hard look at the country’s trade architecture and dismantle archaic barriers that limit choices for domestic consumers and encourage corporate inefficiency.

If India seeks a seat at the global high table, then it has to engage with the world on an equal footing. This means competing without the crutches of subsidies, tariffs and regulations.

And for hyperventilating investors, this might be a blessing in disguise. Remember, every crisis appears to be a world-ending catastrophe as it unfolds. The dotcom bubble, 9/11, global financial crisis, and Covid-19 all led to harrowing losses in the initial phase.

It was only in hindsight that investors realized these panics were the best time to ‘buy the dip’.

What matters now more than ever is to maintain a long-term focus in the midst of alarming headlines and bleeding portfolios. Equanimity in the face of crisis. Isn’t that another message of the Gita?