The impact of U.S. President Donald Trump’s 25% reciprocal tariffs on India, along with an additional 25% punitive tariff over Russian oil purchases, was felt not only by businessmen and international traders but also by the middle and upper-middle classes.
Over the past decade, growing digital awareness encouraged many Indians to shift from traditional bank fixed deposits to mutual funds in search of potentially higher returns.
For years, the bullish trend in the BSE Sensex reassured investors. While bank FDs offered 5–7% interest, mutual funds delivered strong double-digit returns during extended bull phases, sometimes ranging between 20–45% over two to three years.
This performance created confidence that equity investments would continue to outperform traditional savings instruments over time.
However, during the period of tariff tensions and broader global uncertainty, the Sensex fell from a peak of around 86,000 to nearly 70,000, sharply impacting equity portfolios and mutual fund investments.
Those who invested in mid-2024, when markets were near their peak, faced significant short-term losses.
“It has been more than one year since I invested in a popular mutual fund. Sadly, my investment is still at a 10% loss. Had I kept the money in an FD, I would have earned at least 7% interest by now,” said a retired professor.
A software employee shared a similar story: “In 2022, I invested in a mutual fund and withdrew in early 2024, reaping a 40% profit. That was phenomenal. Encouraged by that experience, I cancelled all my FDs and invested only in mutual funds. Now I am at a loss. I am waiting to withdraw when the Sensex rises to break even. I probably should have invested again when markets corrected, but I feared further declines.”
Even small investors felt the pinch. A flower vendor in Hyderabad said, “I invested in mutual funds to reap good returns, but right now it is in loss.”
Although mutual funds clearly state that investments are subject to market risks, the extended bull cycle in recent years had built strong investor confidence.
The downturn of 2025 served as a reminder that equity markets move in cycles and are influenced by global and domestic factors.
Now, with reports of tariff easing and improving global signals, investors are cautiously hopeful.
“There has been a good rise in the Sensex after news that tariffs may be eased. It covered much of the loss, though we are still in the red. I expect gradual recovery if global conditions stabilize,” said a banker.
While many faced losses, several regular investors also made gains during the volatility.
“The fall from 86,000 to 70,000 was an opportunity. I increased my investments during the correction. As markets recovered, I made a decent profit,” mentioned a businessman.
“Stocks and mutual funds reward informed and disciplined investors who understand trends and risk. They should not be treated like guaranteed-return FDs. Timing, patience, and risk management matter,” he concluded.