Perspective on additional 25% US tariffs by trump affecting the Indian Markets by Karthick Jonagadla, smallcase manager and Founder at Quantace Research
Below the Perspective on additional 25% US tariffs by trump affecting the Indian Markets by Karthick Jonagadla, smallcase manager and Founder at Quantace Research
Washington’s additional 25 % levy—doubling U.S. tariffs on Indian goods to a punitive 50 %—hurts but does not derail India’s structural story. Textiles & garments, gems & jewellery and auto-components together ship ~US$40 bn to America—half of the US$79 bn Indian export basket—and now face a 30–35 % price handicap versus ASEAN and Mexican peers. We expect only a brief 1–2 % draw-down before market buyers step in.
Macro damage should be capped at a 0.3–0.6 ppt FY-26 GDP hit and an US$8–12 bn export shortfall, leaving growth close to 6 %. Crucially, the order carries a 21-day grace period, signalling that Washington is brandishing tariffs as bargaining chips. Game-theory logic favours Delhi: already at its lowest payoff, India can credibly threaten mirror duties on American imports. If talks collapse, U.S. firms are at real risk of forfeiting privileged access to the world’s fastest-growing consumer market, while India pivots supply chains and leans on domestic demand.
Strategy we suggest: Prefer sectors insulated from U.S. goods tariffs—domestic banking, consumption, renewables, telecom. Be cautious on textiles, gems and jewellery , speciality chemicals, low-margin auto ancillaries until clarity emerges.
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