Speaking to ET Now, veteran investor Samir Arora said the market had already priced in the development. “This news came out on Tuesday, and the first round of reaction is done. From a market point of view, I don’t think it will make much difference because these sectors are mostly unlisted and, in absolute terms, the numbers are very small for the country,” he explained.
Arora emphasised that the tariff hike is being seen as a temporary measure. “Broadly, everyone believes this is a two-to three-month situation. Either the trade war continues and President Trump gets very serious, or it gets rolled back. Right now, because it looks so unfair that only India has been targeted, people are assuming it won’t last long,” he said.
‘No Bargaining Power’
Asked if India could use its pharmaceutical exports as leverage—just as China once used rare earth supplies—Arora dismissed the idea. “India has no bargaining power. Pharma can be replaced in 30 minutes by someone else. It is better to keep a low profile and not escalate. Even Europe and Japan are not bargaining, and China is only doing so selectively. There is no need for India to throw its weight around,” he told ET Now.
According to him, retaliation would achieve little. “Even the US, with all its weight, is struggling to get results. So how will our pushback matter? It is better to quietly manage and focus on long-term positives,” he added.
Domestic Focus and GST Hope
Market watchers are instead turning their attention to the upcoming GST rationalisation, expected in the first week of September. Analysts believe tax relief could support consumption and counterbalance the tariff impact.Also read: IT sector slowly showing signs of bottoming out: Capitalmind’s Sidhanth Paul
Arora was optimistic that policy responses could deliver lasting benefits. “Big picture, this can be spun positively. The tariffs are temporary, but the reforms or demand-boosting measures in response can be permanent. Imagine if this pressure forces quicker reforms—then, after a few months, the extra tariff goes away. That’s actually a better deal for Indian corporates and consumers,” he argued.
On GST cuts, he struck a note of caution: “It’s very positive, but the government should avoid offsetting the relief by hiking rates elsewhere. Otherwise, one sector benefits while another suffers. The thumb rule is that money in the hands of the public is always better than money with the government,” Arora explained.
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He also noted that consumer behaviour is changing. “If you save money on soap or shampoo, you won’t necessarily buy more of the same. People might use the extra money for data, travel, or jeans. The response is diffused—but overall, more money with consumers is a good thing,” he said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)