US Tariff Concerns Jolt Banking Stocks

Stressed assets may rise in sector if steep levy stays: Analysts

- NIKITA VASHISHT

A sustained decline in the Nifty Bank index has been a sore point for the Indian stock market for some time now. Between August 21 and 29, when US tariff-related concerns peaked in the markets, the index declined 2,100 points, or 3.7 per cent. The US imposed an additional 25 per cent tariff on Indian imports on August 27, taking the total tariff to 50 per cent.

From its 52-week high of 57,628.40, which it touched on July 2, 2025, the index has dropped 3,626 points, or 6.3 per cent. By comparison, the Nifty50 index has slipped 3.2 per cent during the period.

According to analysts at Elara Capital, stressed assets may rise in the Indian banking sector if steep US tariffs stay in place.

Sector exposure
Textiles, leather, and gems & jewellery are the three hardest-hit segments from higher tariffs. Loans towards these segments (not only towards US exporters) account for nearly 2 per cent of the systemic loans, according to Elara.