Indian equity markets are bracing for a week of potential volatility, shaped by a confluence of factors including the fallout from a recent Supreme Court verdict on US tariffs, fluctuating global oil prices amid heightened US-Iran tensions, the release of Q3 FY26 GDP figures, and the monthly F&O expiry. Experts predict a rangebound market, with the Nifty 50 needing to decisively surpass and sustain the 26,000 mark to signal a stronger upward trend.
The week’s direction will be heavily influenced by developments surrounding the India-US trade relationship, particularly in the wake of the Supreme Court’s decision regarding tariffs imposed by the Trump administration. The US recently increased its global import levies to 15% from 10% after the Supreme Court struck down earlier tariffs, prompting a reassessment of the interim trade deal between the two nations as reported by CNBC. India’s trade negotiators have postponed a planned visit to Washington D.C. To evaluate the implications of these changes.
Adding to the complexity, geopolitical tensions between the US and Iran continue to exert pressure on global oil prices. The US has been critical of India’s continued import of discounted Russian crude oil, arguing it undermines Western sanctions and funds Russia’s war in Ukraine according to the Indian Express. This situation has led to a 25% reciprocal tariff on Indian exports, initially expected to be reduced to 18% under the proposed trade deal.
Economic Data and Market Volatility
Beyond trade and geopolitics, the Indian economy will be closely watched for the release of Q3 FY26 GDP numbers. This data will provide a crucial snapshot of the country’s economic performance and could significantly impact investor sentiment. The monthly F&O expiry is expected to contribute to market volatility, as traders adjust their positions.
The US economic calendar also plays a role, with weekly US jobs data anticipated to influence global market trends. Investor sentiment will also be sensitive to the mood of Foreign Institutional Investors (FIIs), whose activity can have a substantial impact on Indian equity markets.
Trump’s Trade Policies and India’s Response
The current trade tensions stem from early 2025, when the Trump administration initiated a series of tariffs under “reciprocal tariff” policies aimed at reducing the US trade deficit. Though, the primary catalyst for punitive duties on Indian exports was New Delhi’s continued purchase of discounted Russian crude oil as detailed in the Indian Express timeline. Despite numerous rounds of negotiations throughout 2025, disagreements persisted, with Trump repeatedly warning of further tariff increases unless India curtailed its Russian oil imports.
Interestingly, despite the 50% tariffs imposed by the US, India’s goods exports to the US rose by 14.5% in October 2025, marking the first increase in five months. This was partially attributed to agreements for India’s state-run oil firms to import more liquified petroleum gas (LPG) from the US and exemptions for certain farm goods according to the BBC. However, overall exports still experienced a decline, highlighting the complex impact of the tariffs.
Recent Developments in the India-US Trade Deal
In early February 2026, President Trump announced a new trade deal with India, stating that New Delhi had agreed to curb its purchases of Russian oil and increase energy imports from the United States and potentially Venezuela as reported by the New York Times. The details of this agreement remain somewhat sparse, but it represents a potential turning point in the trade dispute.
the US plans to impose an extra 25% tariff on trade with Iran, which could further impact India, a major importer of Iranian organic chemicals worth $512.92 million in 2024 according to Business Standard.
Looking ahead, the market will be closely monitoring further updates regarding the India-US trade deal, developments in the US-Iran situation, and fluctuations in oil prices. The outcome of these factors will likely determine the trajectory of Indian equity markets in the coming weeks.
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