Can India be a live hedge against trade wars and tariffs?

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Analysts say the key reason for these steps was the relatively isolated economy of India, which we previously discussed Last week ‘Inside India“

Morgan Stanley notes that only 12% of the Indian economy depends on the export of goods. In addition, exports of goods to the United States amounted to an even smaller share – 2.1% of GDP. Make pharmaceutical imports and energy, both of them are not yet released from tariffs, and the tariff goods make up only 1.7% of India’s GDP.

Failing out the fighter, the chief economist in India, Subasan, said in India there would be “low” impact in the US among Asian economies, and “the direct impact of higher tariffs on demand for exports will be low”.

It seems that the country shows qualities that could develop in a safe shelter in the market in the future.

For example, India’s economy is managed by consumers and is less dependent on exports than other market economies to stimulate growth. According to experts, it makes it relatively well -dynted from external upheavals such as trading wars.

Meanwhile, more than four -fifth capital market belongs to the country. Internal Investors – which regularly poured billions Systematic investment plans – Usually, the prices for assets from the whims of foreign investors during the events that enhance volatility are closed.

“The start of the Indian stock market is mostly decided at the domestic level,” said Alexander Redman, CLSA chief strategist.

The Morgan Stanley fighter also noted that the recent decline in oil prices, which precedes the concern of the global growth, can become positive for India, given that the energy is a large proportion of the Indian import bill. The feedback between global growth and benefit to the Indian economy appears to be another arrow in India’s quicker.

In 2022, India imported fuel worth $ 277 billion. This was 38% of all imports to the country this year, reports World Bank data.

“Slowly global growth often leads to a decrease in global prices for goods, as seen in reducing oil prices ~ 22%, affecting trading conditions in India positively (since India is a pure importer),” the fighter added.

A long decline in the Indian stock market, which preceded the US presidential election and was caused by high appreciation, also reduced stock prices to a higher level.

“India has the most negative (promotions) reviews … in new and developed markets, with the exception of Indonesia,” said Redman CLSA.

Analysts have moved their income to the share is forecast for 60% of companies in the MSci India index, compared to 55% of MSci markets developing in Asia’s markets, according to FACSET.

This may have offered the floor value for stocks and mitigated the overgrown markets that have been overwhelming in recent weeks.

The question investors may ask themselves whether these trends are likely to remain or the world will return to their old ways?

Inflation in India is cooled. Annual inflation in India has fallen on In March the lower than expected, 3.34%The Ministry of Statistics and the implementation of the country’s program was reported on Tuesday. Reading fell for the fifth consecutive month and passed just below 3.61% in February, as the rise in food prices continued to soften. Economists interviewed by Reuters expected reading 3.6%

India’s factory exit slows down. Industrial production index, which measures factory activity, showed by 2.9% increase in February, sharply decreasing with 5.2% growth in January. Slowing in production and mining sectors According to the Ministry of Statistics and the implementation of the program, they contributed to the decline.

Apple accelerates iPhone supplies from India. In March, the Cupertino Company is based exported 600 tons of iPhonesAlmost $ 2 billion from India to the US before the so -called “mutual tariff” of US President Donald Trump, Reuters reports. Accordingly, Foxconn and Tata, the main suppliers of Apple in India, survived their export value this month.

Indian shares have been held on the best weekly speeches since July 2022. Nifty 50 This week the index increased by 4%, but this year the landmark still decreased by 1.3%.

Over the past week, the benchmark of the 10-year yield of Indian government bonds decreased by 6 basic points to 6.38%, which is the lowest since December 2021.

On CNBC television this week Shilpak Ambule, the High Commissioner of India in Singapore, said Sembcorp, Singapore’s Energy and Urban Development Company “actively views three or four sites in India” build new industrial cities. He added that the Indian government is in “launched negotiation stages” with the Sembcorp on these fronts.

Meanwhile, Chryscapital Cunnoper Schrof’s leader noted that Indian companies conducting initial public offers can more count on internal support Compared to a decade ago, when the market was determined by foreign institutional investors.