“This situation is slightly different from what we saw with other countries,” Rajeev Agrawal of DoorDarshi India Fund told ET Now. “After a certain point, there really wasn’t much dialogue between India and the US. Whatever was decided weeks ago has simply played out, and markets have already factored this in. I don’t expect a big knee-jerk reaction tomorrow.”
Which sectors could feel the heat?
The tariffs are expected to hit export-heavy industries hardest. “Textiles, auto components, metal components, agri produce, and shrimp exports are likely to be impacted,” Agrawal said. “Finding new markets is possible, but it takes time. While some of this is priced in, as numbers start reflecting deterioration, markets could react further.”In contrast, domestic-focused sectors may prove more resilient. “Infrastructure, banking, and capital markets should continue to do well. The government will try to boost the domestic economy to cushion the tariff blow. Stock opportunities lie more in domestic plays,” he added.
Is a relief window possible?
On the likelihood of a 90-day relief extension from Washington, Agrawal was less hopeful. “Wherever the US has offered such windows, it was tied to strategic leverage—for example, China and rare earths. At this stage, it’s not clear what India could offer in return. Without active high-level negotiations, I don’t see much scope for such a window.”
Can reforms soften the blow?
The tariff rollout coincides with expectations around India’s GST 2.0 reforms. “By Diwali, GST 2 reforms should roll out, but the real question is how much of what’s expected will actually be delivered,” Agrawal said. “Beyond GST 2.0, the government has hinted at additional reforms. If those materialize, India’s domestic-driven GDP could get a strong push. In that case, the long-term tariff impact may not be as damaging.”
For now, exporters will bear the brunt, but broader markets may find balance in a reform-led domestic growth story.