Trump Tariff Impact: Infosys, Wipro, HDFC Bank, Other ADR Shares Drop After US Levies 25% Tariff On India

Trump Tariff Impact: American Depository Receipt (ADR) shares of India's major blue-chip companies listed on the New York Stock Exchange (NYSE) logged sharp cuts on Wednesday, July 30, after US President Donald Trump announced that he has imposed a supersized 25% tariff rate on India for trade.

ADR shares of Infosys, Wipro, HDFC Bank, ICICI Bank, and Dr Reddy's Laboratories dropped after the tariff announcement. Wipro ADR last dropped 1.79% to $2.79 on the American stock exchange, while Infosys ADR was down 0.73% to $17.09.

Banking heavyweights listed on NYSE, including HDFC Bank and ICICI Bank also traded lower. HDFC Bank ADR dropped 1.35% to $76.415 and ICICI Bank ADR fell 1.41% to $33.305. Dr Reddy's Laboratories ADR logged the steepest cut among the pool, plunging by 4.75% to $14.07 on the NYSE.

ADR is a tool for foreign companies or organisations to trade on US stock markets, just like regular the shares of US-listed companies. In theory, an ADR is similar to a special certificate issued by a US bank.

The Indian stock market awaits a gap-down opening on Thursday, July 31, after US President Donald Trump announced a supersized 25% tariff rate on India for trade. Some D-Street experts believe the tariff announcement will lead to a sudden 'knee-jerk' reaction and extended volatility for the next few sessions.

Gift Nifty trades at 24,712 level, down nearly 150 points, a discount of nearly 140 points from the Nifty 50 futures’ previous close at 24,860, indicating a muted start for the Indian stock market on July 31. Co-incidentally, the monthly expiry is also slated for tomorrow, which may increase volatility in trade.

"In response to President Trump’s recent imposition of a 25% tariff and penalties on Indian goods, investors will reassess their strategies with a mix of caution and optimism. Sectors like textiles, pharmaceuticals, and automotive components—key Indian exports—are likely to be most impacted and may see reduced investor interest in the short term," said Utsav Verma, Head of Research - Choice Institutional Equities.

However, recent progress in trade negotiations suggests a constructive path forward, and we believe that the trade deal will eventually follow provided both nations show the necessary political will.

Many investors expect the tariff rate to eventually settle around 15%, paving the way for renewed confidence and stronger trade ties. "In the short term, market will try to shed off its complacency. We do not expect huge knee-jerk reaction but a rangebound market focused on ongoing earnings," added Verma.

Apart from the 25% tariff rate, Trump said in a post on Truth Social that India will pay a penalty for its purchases of Russian military equipment and Russian energy. The announcement comes after Trump on Tuesday said that the rate of tariff to be levied against Indian imports had not been finalised yet. In another post on the social media platform, Trump added that US have a massive trade deficit with India.