The Indian benchmark indices began the trading in red on Tuesday, after a draft notice published by the Department of Homeland Security (DHS) revealed that US President Donald Trump plans to go ahead with 50 per cent tariffs on Indian goods from Wednesday.

The Nifty 50 fell 167.90 points, or 0.67 per cent, at 24,799, while the Sensex declined 546 points, or 0.67 per cent at 81,089.

Trump had earlier said the US would raise tariffs on Indian goods to 50 per cent from 25 per cent, citing the country's purchases of Russian crude oil.

Among sectoral indices, the Nifty Metal index slipped 1.04 per cent. The Nifty Pharma index declined 1.57 per cent, the Nifty PSU Bank index was down 0.84 per cent and the Nifty Private Bank index fell 0.96 per cent.

Reserve Bank of India (RBI) Governor Sanjay Malhotra on Monday said that the central bank’s focus on price stability has played a key role in strengthening India’s macroeconomic fundamentals.

Speaking at ‘FIBAC 2025’, organised jointly by FICCI and IBA, he added that while price stability remains the primary objective of monetary policy, growth has never been lost sight of.

“We will continue to conduct monetary policy with the primary objective of price stability, keeping in view the objective of growth,” Malhotra said, describing financial and price stability as essential for sustainable economic expansion.

India’s real investments grew at an average of 6.9 per cent annually between fiscals 2021 and 2025, outpacing the country’s gross domestic product (GDP) growth of 5.4 per cent in the same period, a new report said on Monday.

The report by Crisil, titled ‘The Road Ahead for Investments’, said India’s investment rate in fiscal 2025 was higher than the decadal average, supported mainly by government and household spending.

“India’s real investments grew 6.9 per cent per year (average real growth) over fiscals 2021-25, faster than the 5.4 per cent gross domestic product (GDP) growth,” the report said.

Investments, measured as gross fixed capital formation, stood stronger both in nominal and real terms compared to the average between fiscals 2016 and 2025.

The Indian equity indices settled in the positive territory on Monday amid expectations around a rate cut by the US Federal Reserve next month.

Buying in IT heavyweights remained the key reason behind the rally.

Sensex ended the session at 81,635.91, up 329.06 or 0.40 per cent. After a sharp decline in the last session, the 30-share index opened with a decent gap-up at 81,501.06 against the previous session's closing of 81,306.85. The index further escalated the momentum to touch an intraday high at 81,799.06 but remained range-bound.

Nifty closed 24,967.75, up 97.65 points or 0.39 per cent.

Reserve Bank of India (RBI) Governor Sanjay Malhotra on Monday expressed optimism about the ongoing India-US trade negotiations reaching a positive conclusion.

"We are hopeful that negotiations on tariffs will play out and there will be minimal impact," the central bank's governor said during an event here.

Malhotra's comments come as the sixth round of India-US Bilateral Trade Agreement (BTA) negotiations, originally set for August 25, has been postponed.

The Governor also said that India's robust foreign exchange reserves are sufficient to cover 11 months of imports and provide a strong buffer against external shocks.

Fitch Ratings has affirmed India's credit rating at 'BBB-' with a stable outlook, supported by the country’s robust economic growth and solid external finances.

"India's economic outlook remains strong relative to peers, even as momentum has moderated in the past two years, said the rating agency. "We forecast GDP growth of 6.5 per cent in the fiscal year ending March 2026 (FY26), unchanged from FY25, and well above the 'BBB' median of 2.5 per cent," Fitch Ratings said in a report on Monday.

Fitch expects the direct impact of the US tariff hike on India’s GDP growth to be modest as exports to the US account for only 2 per cent of GDP. It is also of the view that the 50 per cent tariff hike by the Donald Trump administration will eventually be reduced after trade talks are completed between the two countries.

Reserve Bank of India (RBI) Governor, Sanjay Malhotra, on Monday emphasised the crucial role of monetary policy in maintaining stability and supporting growth as India is poised to become the third-largest economy amid the challenges posed by the global economic slowdown and geopolitical tensions.

Addressing the FIBAC 2025 annual conference organised by business chamber FICCI and Indian Banks Association, the RBI Governor underlined that amid the slowing down of advanced economies and supply chain disruptions, it was important to seize new opportunities that may arise.

“We are now at a critical juncture as we navigate a choppy global environment characterised by heightened trade uncertainty and persisting geopolitical tensions. We need to push the frontiers of growth. We must step up our efforts to address the emerging challenges, and at the same time, seize the opportunities that are coming our way,” the RBI Governor remarked.

As the August 27 deadline for US secondary tariffs of 25 per cent falls this week over Russian oil purchase, analysts and global reports say that a total of 50 per cent tariff is unlikely to significantly impact India’s growth due to a robust domestic demand.

While labour-intensive textiles and gems and jewellery segment are expected to see a moderate impact, pharmaceuticals, smartphones and steel are currently relatively insulated because of exemptions, existing tariffs and strong domestic demand.

According to S&P Global Ratings, the macroeconomic impact of the hike in tariffs would be cushioned by the large size of the India’s domestic market.

The Indian benchmark indices opened the week with gains on Monday, as IT stocks led the rally after a potential rate cut in the US boosted investors' sentiment.

The BSE Sensex gained 251.41 points, or 0.31 per cent to touch 81,558. The Nifty 50 inched up 71 points, or 0.29 per cent up to 24,941.

Sector-wise, the Nifty IT index led the gains with 1.77 per cent surge followed by Nifty Metal index up 0.88 per cent. The majority of other indices showed moderate gains.

In the Nifty pack, Infosys, Tech Mahindra, TCS, Bajaj Finance, Hindalco and NTPC were the major gainers. ICICI Bank, Apollo Hospital, Jio Financial and Maruti Suzuki were the major laggards.

Private sector lender Yes Bank on Saturday said that Japanese Sumitomo Mitsui Banking Corporation (SMBC) has received Reserve Bank of India's (RBI) nod to acquire 24.99 per cent stake in the bank.