Trump’s Russia Sanctions Push Indian Markets Into Turmoil, Sensex-Nifty Sink Over 1%

US President Donald Trump's support for the Sanctioning Russia Act of 2025 has shaken the Indian stock market, along with global markets.

On Thursday, January 8, 2026, both major Indian stock market indices, the Sensex and Nifty, recorded a sharp decline of more than 1%. The biggest reason behind this decline is the US's proposal to impose import duties of up to 500% on countries that continue to purchase oil and energy products from Russia.

As soon as this news spread, a sell-off began on Dalal Street, wiping out approximately ₹8.1 lakh crore of investor wealth in just one day.

What is the Sanctioning Russia Act of 2025 and the threat of tariffs?

This controversial bill, introduced by US Senator Lindsey Graham, has received open support from Donald Trump. Under this law, the US will impose a punitive tariff of a minimum of 500% on goods and services from countries that import Russian oil, gas, or uranium.

Since India is currently one of Russia's largest oil buyers, investors fear this will severely impact Indian exports (such as IT services, pharmaceuticals, and textiles). Trump argues that countries like India are funding Putin's war machine by purchasing cheap Russian oil, and he will use these strict tariffs to prevent them.

Sensex and Nifty fall in the red as soon as the market opened on Thursday, and by the close, the BSE Sensex fell 780 points to 84,181. The NSE Nifty also fell 264 points to close at 25,877.

This is the fourth consecutive market decline in the last four trading days, with the Sensex losing over 1,600 points.

This market decline has brought the total market capitalization of the BSE down from ₹479.94 lakh crore to ₹471.82 lakh crore.

Major selling in the IT and metal sectors

The most direct and devastating impact of Trump's move is being seen on the Indian IT sector, as a large portion of Indian IT companies' revenues come from the US.

L&T shares fell by 3.35% in today's trading, while giants like Tech Mahindra and TCS also saw significant declines of 2.5% to 3%.

In addition, major stocks like Infosys, Tata Steel, and Reliance Industries also played a major role in dragging the market down. There is fear in the market that if this bill becomes law, providing services to the US will become extremely expensive and difficult for Indian companies.

Growing tensions in India-US trade relations

This is not the first time Trump has targeted India on the issue of tariffs. Recently, he indicated that Prime Minister Narendra Modi was "not very happy" with his tough tariff decisions.

India already faces tariffs of up to 50% on US goods, a significant portion of which are related to Russian oil purchases. Experts believe that Trump is using this 500% tariff threat as leverage or a pressure tactic to distance India from Russia.

However, India has not yet given any clear assurance of reducing Russian oil purchases, citing its energy security.

The Way Forward for Investors and Market Trend

Market experts say that volatility may increase further in the coming days as the US Congress is likely to vote on the bill next week.

Consequently, foreign institutional investors (FIIs) have begun withdrawing their funds from the market, net selling ₹1,668 crore in the last session alone.

Although India's GDP growth forecast (7.4%) is positive, Trump's tariff war has created new uncertainty for the domestic market.

Investors are advised to avoid large investments for the time being and keep a close eye on global geopolitical developments.