DNA TV Show: How Donald Trump and Xi Jinping's fight on tariffs is impacting the world

Monday, the first trading day of the week, proved to be Black Monday for the Indian market. Due to the bad signals received from the US, the Indian market opened with a decline of 4-5 per cent, and there was a loss of more than Rs 16 lakh crore. April 7 was the biggest decline in a day after June 2024. 82 per cent of the shares in the stock market saw a decline. India VIX, which shows the fear and uncertainty of the market, rose by 66 per cent on Monday. 

Due to the tariff war that started between the US and China, there is a danger of recession all over the world. The Hong Kong market fell by 13 per cent, the biggest drop since 1992. European markets have come to the lowest level since January 2024. Crude oil has fallen to its lowest level since 2021; now, the price of crude oil has reached USD 60. The price of gold in the international market has fallen to a 3-week low. US brokerage and research company, Goldman Sachs, has increased the possibility of recession in the US from 20 per cent to 45 per cent. Investment firm JP Morgan has increased the estimate of recession in the world to 60 per cent.

The question is that if a tariff war continues between the US and China and recession comes, how much impact will it have on India? According to NASSCOM data, more than 51 lakh people work in the IT sector in India. 40-60 per cent of the income of most companies in the IT sector comes from the US. In such a situation, if recession comes first in the US, then the demand there will decrease, and there can be large-scale layoffs in the IT sector.

Textile is the second largest sector in providing employment in India. After China and Vietnam, India is third in supplying textiles to the US. If the demand in the textile sector decreases due to tariff increase and recession in the US, then direct employment opportunities in this sector will also decrease or there will be layoffs.

The chemical sector accounts for 18 per cent of the total exports to the US. Due to tariff increase and the recession in the US, pressure will be seen on the chemical sector as well, and there will also be fewer employment opportunities and layoffs.

The biggest thing is that sectors like textile and chemical are more unorganized, that is, small industries work in it. In such a situation, if this industry is affected, the situation in India can deteriorate rapidly. By now, you must have understood that the situation is not good; for the last 1 month, we have been warning you about the recession and the deteriorating condition of the stock market in DNA. Now you have to take care of some things in the next few months:

1. Stop unnecessary expenditure

2. Do not spend on eating outside unnecessarily

3. Save as much as possible

4. If possible, cancel the plan to travel during summer vacation

5. Put a stop to credit card expenses

6. Avoid taking personal loans for now

7. If not needed, avoid any big purchases, including houses and cars.