The analyst said export-heavy industries could face sharp corrections, while domestic consumption plays and defensive sectors may offer safer ground for investors during the turmoil.
Indian markets are staring at a major disruption as the U.S. prepares to impose a 50% tariff on Indian exports starting Aug. 27, a move that could reshape investor strategies across key sectors.
Sectors At Risk
SEBI-registered analyst Rajneesh Sharma said the impact will be most severe for export-heavy industries such as textiles, gems and jewellery, auto components, seafood, and chemicals.
Many exporters are already seeing cancelled orders and shifting production to alternative markets.
Pharmaceuticals and IT services remain exempt for now, Sharma noted, while domestically driven areas such as banks, healthcare, insurance, power, telecom, cement, and real estate may serve as defensive plays for investors.
Sharma said investors should expect volatility, particularly in mid-cap exporters, with some stocks facing corrections of 20–40% if tariffs persist.
While the Nifty is relatively insulated due to its domestic-heavy composition, foreign investors have already pulled more than $4 billion since July.
Investment Strategy
Sharma advised investors to cut back on companies that rely heavily on the U.S. for sales, especially those with more than 30% of their revenue coming from there.
He also cautioned against smaller niche exporters and said the safer bet right now is to focus on businesses driven by India’s own consumption. He added that government relief steps, the rupee’s movement, and the next round of earnings will all be key things to watch.
Long-Term Implications
According to Sharma, if the tariffs drag on, many Indian exporters could start shifting toward Europe and the Middle East or even move parts of their manufacturing overseas to sidestep U.S. trade barriers.
While the near-term outlook looks tough, he said this shock might actually speed up India’s “Make in India + Export to the World” plan, creating good opportunities for investors who can take a longer view.
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