What Do Market Experts Say About US Tariffs and India’s Growth?
Raamdeo Agrawal, Motilal Oswal Group:
- Domestic liquidity remains strong and provides sufficient support for the markets.
- Even if a US trade deal materialises within the next two months, there may not be any significant earnings impact.
- Markets are expected to absorb a 25% tariff hike without major disruptions.
- Earnings recovery continues to be the most crucial factor for market direction.
- Domestic liquidity remains strong and provides sufficient support for the markets.
- Even if a US trade deal materialises within the next two months, there may not be any significant earnings impact.
- Markets are expected to absorb a 25% tariff hike without major disruptions.
- Earnings recovery continues to be the most crucial factor for market direction.
JPMorgan’s Jahangir Aziz:
- Using WPI as the deflator for GDP makes dissecting tariff impact on growth less meaningful.
- GST cuts are structural and permanent, while tariff hikes are temporary by nature.
- In the medium term, higher tariffs could influence both FDI and FPI flows.
- India’s exports to the US account for nearly 2% of GDP; excluding protected sectors, the effective impact may be closer to 1.1% of GDP.
- Using WPI as the deflator for GDP makes dissecting tariff impact on growth less meaningful.
- GST cuts are structural and permanent, while tariff hikes are temporary by nature.
- In the medium term, higher tariffs could influence both FDI and FPI flows.
- India’s exports to the US account for nearly 2% of GDP; excluding protected sectors, the effective impact may be closer to 1.1% of GDP.
BOFA Securities – Market Outlook:
- Tariff Impact: Markets are likely to price in a 50% tariff negatively.
- Resolution Timeline: Tariff issue expected to be resolved within 1–2 months.
- Government Action: Authorities are working to stimulate fiscal liquidity.
- Market Recovery: Expected to be shallower than street expectations.
- Consumer Sector: Companies with leveraged benefits may see earlier growth uptick.
- Tariff Impact: Markets are likely to price in a 50% tariff negatively.
- Resolution Timeline: Tariff issue expected to be resolved within 1–2 months.
- Government Action: Authorities are working to stimulate fiscal liquidity.
- Market Recovery: Expected to be shallower than street expectations.
- Consumer Sector: Companies with leveraged benefits may see earlier growth uptick.
Our Take:
The contrasting views highlight three key themes:
The contrasting views highlight three key themes:
- Liquidity cushion: Strong domestic inflows are acting as a shock absorber, ensuring that short-term global disruptions do not derail the market.
- Tariff vs. growth: While tariffs may pose challenges, their overall GDP impact appears limited. Investors should focus more on the earnings recovery cycle, which remains the strongest driver for markets in 2025.
- Market expectations: Even with tariff concerns, the recovery may be slower than expected, so selective exposure in sectors with leveraged growth potential could benefit early movers.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
Written by Indian-Share-Tips.com, which is a SEBI Registered Advisory Services
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