Global Trade Tensions Ease: How Will India`s Markets React?
The US government has announced a one-month reprieve on auto import tariffs from Mexico and Canada, signaling a possible easing of trade tensions. According to the MOSt Market Outlook Report (March 6, 2025) "Global markets surged 1-2% on optimism surrounding tariff exemptions, benefiting Indian equities."
Impact on Indian Markets
The relief on tariffs reduces uncertainty in global trade, making it beneficial for export-driven
industries in India, including:
Automobiles: "Lower trade barriers improve export competitiveness for Indian
automakers."
Textiles & Pharmaceuticals: "Reduced tariffs offer better pricing power for Indian
exporters."
IT & Software Services: "Stable trade relations could encourage more outsourcing to
India."
Sectoral Gains
1. Auto Stocks
"Indian automakers exporting to the US, like Tata Motors and M&M, could benefit from lower
trade disruptions," notes the report.
2. Pharma & Healthcare
"Pharmaceutical firms with strong US exposure stand to gain from eased trade barriers."
3. IT Services
"Indian IT companies are likely to benefit from increased corporate spending in North
America."
What Should Investors Do?
"Monitor global trade policy updates for potential investment shifts."
"Diversify across export-driven sectors to hedge against trade risks."
"Look for undervalued stocks that can benefit from trade normalization."
The easing of trade tensions, combined with India’s strong domestic market fundamentals, could
support long-term equity growth.
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