The markets are no doubt bracing for a volatile session ahead. Though the GIFT Nifty seems to be indicating a fairly encouraging start for our markets, the big concern is the longer-term impact of US President Donald Trump’s tariff hike after the US Supreme Court verdict.
However, key market experts don’t see the current announcement of the 15% global tariff as a big worry for the Indian markets. In fact, some believe that this development could be positive for export-orientated sectors, as businesses will now be subject to a uniform global import duty.
Why is 15% global tariff not a big worry for India
Over 90 countries would be subjected to similar tariffs. Helios Capital founder and fund manager Samir Arora pointed out that there is “nothing wrong with 15% as far as India is concerned. Tariffs have power if you can pitch one country against other. If all countries have 15% (or 10%) how does it matter much? This is more of an internal tax issue for the US now. Beyond 5 months how this will be extended is not obvious anyway and will need congressional approval.
Nilesh Shah, MD of Kotak Mahindra AMC, added that, “The street expectation is that the US will use various provisions of law to keep tariffs almost unchanged. Any change will be for the short term and hence unlikely to impact market direction materially.”
Meanwhile, Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, reiterated the sentiment and explained , “The introduction of a uniform rate across countries also removes the relative disadvantage arising from differential trade arrangements with the US. For India, the effective tariff burden is expected to ease from 25%.”
Key sectors in focus
That said, the situation remains fluid. Any fresh statements or alternative tariff actions under different presidential authorities could reintroduce volatility in the near term.
Sudeep Shah considers that this development could be positive for some key sectors in India, “Sectors such as IT, Pharma, Metals, Textiles and Energy stand to benefit from the reduction in tariff uncertainty.
Another important aspect to monitor is the uncertainty surrounding the approximately $175 billion collected under tariffs over the past year and the potential implications of refund claims.”
What’s the big trigger going forward?
Most experts, however, feel that going ahead, the key market triggers will include the trajectory of inflation and movements in the US Dollar Index.
Vinod Nair, Head of Research, Geojit Investments, expects that, “Structurally, markets remain constructive, though near‑term moves are likely to stay flow‑driven amid global uncertainties, keeping the buy‑on‑dips, sell‑on‑rallies trend intact.”
Overall, market observers are now in the wait-and-watch mode, and investors are set to balance global developments with fundamental factors while deciding on the investment strategy going forward.
