Market under pressure as Trump tariff offsets RBI's expected rate cut pause
Experts believe this tariff increase will negatively impact India's outbound trade to the US, which is valued at nearly $100 billion. The move is also expected to affect the earnings of many companies that derive a significant portion of their revenue from exports to the US.
Sunny Agrawal, Head of Fundamental Research at SBI Securities, told TNIE that the market may open flat or slightly lower on Thursday with a negative bias. This is because the tariff will apply only after 21 days, creating uncertainty about whether and when it will actually come into effect.
'By allowing 21 days, Trump is keeping the negotiation window open, which is likely to provide some relief to investors. I also feel most negative cues are already factored in,' said Agrawal. He added that sectors like Gems & Jewellery and Textiles, which have maximum exposure to the US market, have seen sharp corrections in recent sessions.
Regarding pharma companies, Agrawal said, 'It is difficult to predict the impact because imposing taxes on medicines is not easy for any country.'
Concerns over escalating US-India trade tensions overshadowed the Reserve Bank of India's (RBI) decision to keep the repo rate unchanged at 5.5%, a move that was widely anticipated by markets.
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