Navin Fluorine, SRF and other chemical stocks drop up to 6% after US tariff

Indian chemical stocks, including Navin Fluorine, PI Industries, UPL, and SRF, fell by up to 6% in Thursday’s trade after the Trump administration imposed a 26% blanket tariff on Indian imports.

The chemicals sector is expected to face a negative impact, with Navin Fluorine (25% revenue exposure), PI Industries (20%), and SRF (7%) directly affected by the higher tariffs. According to Jefferies, the 26% U.S. tariff on the sector could significantly impact revenue streams.

Auto stocks were also hit, with Balkrishna Industries, Bharat Forge, Bajaj Auto, Tata Motors, and Motherson falling by up to 4% in response to the announcement. Analysts view this as a major setback for India’s export-driven sectors, particularly automobiles.

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The automobile sector, which contributes around 3% of India’s total exports to the U.S., is expected to face demand pressures. “A 26% blanket tariff will likely impact demand and the competitiveness of Indian automobile exports in the American market. This could lead to increased production costs, potential layoffs, and supply chain disruptions,” Macquarie noted.

The brokerage also warned that such steep tariffs across industries could impact India’s GDP by up to 50 basis points.India’s auto component exports to the U.S. account for one-third of the total industry exports of $21.2 billion. However, in the U.S. import basket for auto components, India’s share stands at just 2%, compared to Mexico’s 39%, Canada’s 13%, and China’s 12%.Also Read: Trump’s tariffs send markets reeling, amid trade war and recession fears

The new tariff could impact companies like Sona BLW Precision Forgings, which derives 40% of its revenue from the U.S. market, while Bharat Forge gets around 30%, and Motherson Group around 18%.

Reacting to the news, Indian markets saw a knee-jerk reaction at the opening bell. The BSE Sensex fell over 500 points, while the Nifty50 slipped below 23,200 within the first 15 minutes of trade.

The 26% levy on Indian imports is higher than the 20% imposed on the European Union, 24% on Japan, and 25% on South Korea.

While China faces the steepest tariff at 54%, India’s sudden inclusion in the higher tariff bracket is seen as a significant setback for its trade relations with the U.S.

Meanwhile, New Delhi is currently in talks with Washington to negotiate a bilateral agreement to minimize the economic fallout and secure better trade terms for affected industries.

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