Global economic signals weakened in March, with JP Morgan’s Global PMI dropping to 50.3, indicating slowing momentum across developed markets like the US and Europe. Meanwhile, emerging markets led by India and China remained relatively strong.

A key development was President Trump’s imposition of a 10% blanket import tariff, with steeper duties for China (145%).

This triggered sharp global equity selloffs, volatility, and investor flight to safe assets like gold and bonds.

Global markets witnessed corrections amid investor uncertainty, with U.S. indices falling sharply due to trade tensions and inflation. India showed economic resilience, driven by strong rural consumption, rising capex, and stable government finances. While exports dipped, services and domestic demand remained strong.

Indian equities declined for a fifth consecutive month, but valuations are nearing historical averages.

February 2025 was marked by heightened global trade tensions under Trump’s second term, with renewed tariffs on Chinese imports and a strengthening U.S. dollar driving capital away from emerging markets. The Indian Rupee depreciated to ₹86/USD and FPIs withdrew ₹1 lakh crore over three months. Despite this, Domestic Institutional Investors cushioned markets with ₹90,000 crore in inflows.

India’s Union Budget emphasised demand stimulation through personal tax cuts, infrastructure investment, and clean energy incentives.