The Indian equity market has shown resilience so far during the weekly options expiry session, despite US President Donald Trump escalating the tariff war against India.<\/p>\n
Trump announced an additional 25% tariff on Indian exports as a “penalty” for New Delhi\u2019s continued import of Russian crude oil. This comes on top of the 25% tariffs already imposed on Indian goods on July 20.<\/p>\n
However, this may not be a done deal just yet. A 21-day off-ramp period could leave the door open for negotiations. If implemented, the move could bring exports from key sectors, such as textiles, jewelry, and auto ancillaries, to a halt, dealing a blow to India’s labour-intensive industries.
\n<\/p>\n
\nBrokerage firm Emkay Global, however, remains confident in the broader economic outlook and expects a consumption-led recovery in the second half of FY26. The brokerage said it would look through any near-term volatility stemming from this announcement and would consider buying into any substantial market dip of over 5%.<\/p>\n
Impact on India<\/p>\n
The direct earnings impact on listed companies is likely to be limited. However, a cumulative 50% tariff would make Indian exports to the US virtually unviable, potentially triggering second-order effects on employment-heavy sectors like textiles and jewelry.<\/p>\n
Emkay expects the government to intervene with fiscal support for the affected sectors, including measures to protect banks from a potential spike in non-performing loans (NPLs).<\/p>\n
India’s reliance on domestic consumption is expected to prevent a sharp growth collapse, though targeted stimulus may be needed to cushion the blow.<\/p>\n
In the short term, the announcement could trigger a vicious cycle involving concerns around the current account deficit (CAD), rupee depreciation, foreign portfolio investor (FPI) outflows, and a correction in equity markets. Emkay believes such a phase would be short-lived.<\/p>\n
Sectoral impact<\/p>\n
The most exposed sectors include \u2014<\/p>\n
Textiles: Gokaldas Exports, Kitex Garments<\/p>\n
\nChemicals: Camlin Fine Sciences, Aarti Industries, Atul Ltd<\/p>\n
Auto Ancillaries: Bharat Forge, Suprajit Engineering, Sona BLW<\/p>\n
If India reduces Russian crude imports as part of a settlement, companies like Reliance Industries and oil marketing companies (OMCs) could come under pressure. Additionally, global crude prices may spike.<\/p>\n
Pharma and electronics manufacturing services (EMS) appear to be exempt for now, although a possible announcement by Apple later today could affect EMS sentiment.<\/p>\n
Emkay also said that this may not be the final form of the tariffs, and sector- and stock-level impacts could evolve in the coming days.<\/p>\n
Investor Outlook: Driving without headlights<\/p>\n
Emkay cautioned that investors are currently navigating in the dark. Its key recommendations are:<\/p>\n
– Don’t overreact to short-term volatility: Trading this uncertainty is highly risky, with news flow prone to sudden swings.<\/p>\n
– Limit exposure to export-oriented sectors: Even if the final trade deal softens, a sharp global slowdown appears likely.<\/p>\n
– Buy the dip beyond 5% correction: Valuations would then become attractive, and the direct earnings impact remains negligible. Moreover, India\u2019s cyclical recovery in H2FY26 remains intact, powered by domestic demand.<\/p>\n
– No change in sectoral stance:<\/p>\n
Overweight: Consumer Discretionary, Industrials
\nUnderweight: Financials, Technology, Staples<\/p>\n","protected":false},"excerpt":{"rendered":"The Indian equity market has shown resilience so far during the weekly options expiry session, despite US President…\n","protected":false},"author":2,"featured_media":50121,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,63,99,2490,42471,42474,42472,42480,42481,42482,42470,171,1487,1611,4679,42475,4967,42473,42479,42476,42477,42478,39583],"class_list":["post-50120","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-au","tag-australia","tag-business","tag-donald-trump","tag-india-market","tag-india-trump-tariff-impact","tag-india-trump-tariffs","tag-india-us-tariff-news","tag-india-us-tariff-talks","tag-india-us-tariffs-latest-news","tag-indian-market","tag-markets","tag-nifty","tag-sensex","tag-stock-market","tag-stock-market-update","tag-trump-tariffs","tag-trump-tariffs-2025","tag-us-india-tariff","tag-us-india-tariffs","tag-us-india-tariffs-2025","tag-us-india-tariffs-news","tag-us-tariffs-on-india"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/50120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=50120"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/50120\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/50121"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=50120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=50120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=50120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}