Investors should focus on export-oriented sectors such as gems and jewellery, textiles, marine products and pharma, where the US administration imposed 100% tariffs on patented and branded medicines and the auto sector.
Kranti Bathini, director of equity strategy at WealthMills Securities, called this a big sentiment booster for Indian markets while dealing a blow to the Trump administration. Its tariffs have created a lot of uncertainty and ambiguity for the world, he added.
However, he cautioned investors to watch for developments over the next few days and see what the Trump administration will do as “face saving” measures. He said that Trump has weaponized tariffs and the 10% global tariff should also be vetted by the US Congress. Since trade does not fall under the ambit of emergency measures, its follow-up decisions will also be subject to scrutiny, he opined.
Following the SC decision, Trump signed documents imposing a 10% tariff on imports from all countries, which he said would be “effective almost immediately”.
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“It is a great honor for me to have just signed the global 10% tariff on all countries from the Oval Office,” he said in a post on Truth Social.
While the 18% tariff burden is likely to be lifted off India’s back, more details will emerge in due course. But the new global tariff of 10% on Indian goods will be applicable now. India will have to pay 10% until another authority is called in, an ANI report quoted a White House official as saying. “Yes, 10% until another authority is called in.”
Market veteran Gurmeet Chadha also welcomed the US Supreme Court’s decision, saying, “The Supreme Court’s ruling on tariffs is welcome news, especially for under-owned markets like India. It’s also a political setback with midterms approaching and low approval ratings.”
“The focus will be on boosting the economy, reducing inflation. That means less global uncertainty and flip-flops,” the managing partner and CIO of Complete Circle Consultants said in a tweet.
Also Read: Trump Makes Tariffs Central to His Presidency Chaos may ensue
SC verdict on India: What does it mean for markets?
A Global Trade Research Initiative (GTRI) analysis said, “Elimination of reciprocal tariffs would exempt about 55% of India’s exports to the US from the 18% duty, subjecting them only to the standard MFN tariff.”
According to the think tank, Section 232 tariffs will continue, at 50% on steel and aluminum and 25% on auto components. Meanwhile, products accounting for around 40% of the export value, including smartphones, petroleum products and medicines, will remain exempt from US tariffs, the report added, citing GTRI analysis.
Therefore, investors should track the movement of metal stocks for potential downside while also monitoring the EMS and generic pharma space.
Reacting to the verdict, frontline indexes on Wall Street also closed higher, with the Dow 30 closing up 0.5%. The S&P 500 index and the Nasdaq Composite ended with gains of 0.70% and 0.90%.
Also Read: US Supreme Court Ruling Overturning Trump Tariffs May Scare Bond Vigilantes
(disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. (These do not represent the views of the Economic Times.)
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