US Tariffs: A Threat to HDFC Bank, ICICI Bank, and IndusInd Bank Stock Performance

US tariffs have jolted bank stocks, with HDFC Bank, ICICI Bank, and IndusInd Bank at risk. The Nifty Bank index has slipped 7% from its July peak, with a 3.4% decline over the past four sessions and a 4% drop in a month. Analysts flag US tariff risks as a concern for HDFC Bank and IndusInd Bank, while City Union Bank and Federal Bank are also under scrutiny.

US tariffs have jolted bank stocks, with HDFC Bank, ICICI Bank, and IndusInd Bank at risk. The Nifty Bank index has slipped 7% from its July peak, with a 3.4% decline over the past four sessions and a 4% drop in a month [1]. Analysts flag US tariff risks as a concern for HDFC Bank and IndusInd Bank, while City Union Bank and Federal Bank are also under scrutiny.

The sustained decline in the Nifty Bank index has been a sore point for the Indian stock markets. Over the past four sessions (between August 21 and 28), the gauge for India’s leading bank stocks has declined 1,935 points or 3.4 per cent, while it has tumbled 4 per cent in a month [1]. Further, from its 52-week high level of 57,628.40, which it touched on July 2, 2025, the index has dropped a mammoth 3,968 points or 6.8 per cent (including Friday’s decline). By comparison, the Nifty50 index has slipped 3.7 per cent [1].

India’s FY26 GDP growth may dip by up to 40 bps as steep US tariffs hit exports, especially in jewellery, leather, autos, and electrical machinery. HDFC Bank’s Sakshi Gupta warns of ripple effects on jobs, investments, and sentiment, though pharma, electronics, semiconductors, and petroleum remain unaffected [2]. The US accounts for about 20–25% of India’s goods exports, and nearly half of that basket is now subject to a 50% tariff. This is a significant blow to export competitiveness [2].

The new 25% duty, announced by President Donald Trump and confirmed by the Homeland Security Department, takes total tariffs to as much as 50%—one of the highest levels imposed by Washington in recent years [3]. Export groups warn that the tariffs could impact over half of India’s exports to the US, worth $87 billion, while competitors in Bangladesh, China, and Vietnam could gain market share [3]. The new tariffs will apply from 12:01 a.m. EDT on Wednesday (9:31 a.m. IST) [3].

Markets reacted quickly to the announcement. The Indian rupee closed at a three-week low of 87.68 against the dollar, even after suspected central bank intervention. Benchmark equity indexes NSE Nifty 50 and BSE Sensex each fell 1% in their worst performance in three months [3]. Private sector economists warn that prolonged tariffs could cut India’s economic growth by 0.8 percentage points this year and next, leading to the steepest earnings downgrades in Asia [3].

References:
[1] https://www.business-standard.com/markets/news/us-tariffs-jolt-bank-stocks-are-hdfc-bank-icici-bank-indusind-bank-at-risk-125082900482_1.html
[2] https://m.economictimes.com/markets/stocks/news/trump-tariffs-may-shave-40-bps-off-indias-gdp-in-fy26-but-3-factors-could-cushion-the-impact-says-hdfc-bank-economist/amp_articleshow/123556911.cms
[3] https://cryptorank.io/news/feed/e5b19-us-50-tariffs-threaten-87-billion-in-indian-exports