A new trade curveball from the White House is shaking up investor sentiment in India. The recent news flow indicates that the tariff implementation has now been deferred to August 7. Pharma, textiles and auto are among the key sectors that the street is watching out for, in terms of potential impact
Sectors and stocks in the crosshairs – Among the worst hit could be:
Textiles and Apparel: India’s textile industry, a major export earner and employer, may face stiff pricing competition, especially with Bangladesh receiving tariff relief.
Pharmaceuticals: Generics shipped to the U.S., a key revenue driver for companies like Sun Pharma and Dr Reddy’s, could become costlier.
Auto Components: With exports to the U.S. valued at $2.8 billion in 2024, key players in drivetrain, EV components, and engine assemblies may experience short-term margin compression.
Telecom Equipment and Electronics: These segments, which depend heavily on U.S. buyers, are likely to see reduced orders or renegotiation of terms.
7 stocks to watch
Navin Fluorine
Navin Fluorine, known for its advanced fluorochemicals and pharma intermediates, derives nearly a quarter of its revenue from American clients. The new tariff makes Indian exports more expensive for US buyers, which could squeeze margins or even result in delayed orders.
The share price of the currently trading down by 1% at Rs 4,988 pers share in the intra day trading.
PI Industries
Agrochemical player PI Industries depends heavily on US clients, especially for custom synthesis orders from multinationals. With roughly 20% of its sales linked to the US, the new tariff may lead buyers to reconsider contracts or shift sourcing to countries with lower duties.
SRF
SRF’s business spans chemicals and textiles, both of which have US exposure in the range of 6% to 8%. The company exports refrigerants and technical fabrics, sectors that could both come under pricing pressure post-tariff.
Balkrishna Industries
Balkrishna Industries, a major player in the Off-Highway Tyres (OHT) segment, exports around 15% of its tyre volumes to the US. The additional duty could either force the company to absorb part of the cost or risk losing market share. Shares slipped up to 2.5% today, trading at Rs 2,617.90 per share.
Ramkrishna Forgings
With over 35% of revenue coming from North America, Ramkrishna Forgings has a lot riding on its US truck and industrial component orders. The 25% duty could make Indian supplies less attractive compared to local or Mexican alternatives.
Reliance Industries
Reliance Industries finds itself caught between two pressure points – tariffs on refined product exports and potential penalties tied to Russian crude imports. While the refining business has some exposure to the US, the broader concern lies in regulatory risks that could push up input costs or reduce export volumes.
Waaree Energies
Among Indian solar exporters, Waaree Energies is one of the most exposed to the US market, with over half its international order book linked to the region. New tariffs, on top of existing anti-dumping duties, could sharply reduce Waaree’s competitiveness against rivals from Southeast Asia.
Other stocks that could come under pressure due to the new US tariffs include Bharat Forge, Steel Strips Wheels, Cummins India, Garware Hi-Tech Films, along with oil companies like BPCL, HPCL, and IOC. While IT firms such as Tech Mahindra, Wipro, and Mphasis have not been directly hit, they could still be impacted if a slowdown in US manufacturing and logistics affects client demand.
Trump Tariff: Indian government responds with caution
As per a Bloomberg report, Indian officials were “shocked and disappointed” by the announcement but are treading carefully. New Delhi has ruled out immediate retaliation. Instead, the government is exploring other ways to manage the fallout such as increasing imports of natural gas, communication equipment, and gold from the U.S. to maintain trade balance.
According to Bloomberg, India has also informed Washington that it is not interested in purchasing the F-35 stealth jets, indicating a pause in high-value defence deals.
Global market reaction
Asian markets did not take the news lightly. Japan’s Nikkei dropped 0.6%, South Korea’s KOSPI plunged 3.2%, while Taiwan and Australia also reported declines. Interestingly, the Hang Seng Index in Hong Kong managed to inch up 0.2%.
As per multiple reports, it is expected that the tariff shock may cause temporary disruption, India’s long-term fundamentals remain intact. Many Indian exporters are already evaluating alternative markets and may even shift production or assembly to tariff neutral zones like Mexico.
With U.S. mid-term elections looming and global supply chains still in flux, the next few weeks will be crucial in determining how deeply these tariffs cut into India’s export growth and whether the trade partnership between the two democracies can weather another round of friction.