MC Market Poll: Experts optimistic on India due to strong domestic policies, Trump's larger focus on China

with China facing higher tariffs, India may become a preferred source, especially for products that continue to be expensive to manufacture in the US or are not viable to be produced in the US.

A majority of market experts in India believes that while Donald Trump will “walk the talk” on China tariffs, his regime could lead to sector-specific wins and losses for India even as the overall impact on India’s growth would be neutral.

These are some of the key findings of the latest Moneycontrol Markets Poll, which saw participation of more than three dozen market players across segments – broking firms, mutual funds, AIFs, PMS and independent experts.

Incidentally, despite the concerns, most seem to be optimistic on India being able to have limited impact on the back of stronger domestic policies and Trump's larger focus on China.

According to the survey, more than 50 percent believe that Trump coming to power will mostly be neutral, with its share of "wins and losses."  Only 11 percent of the survey respondents were of the view that Trump could be bad news for India.

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Trump is scheduled to take oath as the 47th President of the US on January 20.

As per the poll findings, a majority of respondents believe that Trump will stick to his views and may implement some of the tariffs and plans he has spoken about.

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On January 14, via a social media post, Trump said that he planned to create a new department called the External Revenue Service, which will be designated to collect “tariffs, duties, and all revenue” from other countries.

Trump has also recently reiterated that he remains committed to his campaign pledge to institute universal tariffs of 10 to 20 percent on all imports from all countries, with tariffs as high as 60 to 100 percent on Chinese goods.

While tariffs on India would be lower than other countries, a recent BCG report stated that it would result in an additional duty burden of $14.6 billion on India’s exports to the US.

"I think his focus is very clear about protecting America rather than going against China or some other country,” says Amit Doshi of Care PMS.

“There could be a possibility that some items we have been exporting to them, or areas where we currently have benefits, could be negatively impacted. There might be areas where we gain an advantage and areas where we might lose, such as taxes or trade agreements," he said adding that at the end of the day as a businessman Trump will do what is best for his country.

Meanwhile, a majority of the poll respondents – a little over 71 percent -- believe that while there will be uncertainty going ahead, Trump's policies will overall help India's growth.

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On what could possibly “protect India”, Doshi suggests that the volume of trade the US has with China versus India is far lower. "I don't think we are a major concern for America. This is more of a China-centric issue," he says.

Additionally, with China facing higher tariffs, India may become a preferred source, especially for products that continue to be expensive to manufacture in the US or are not viable to be produced in the US.

In a November 2024 note, CLSA's Alexander Redman, had also highlighted that among Asia-Pacific and emerging markets, India shows the least sensitivity to Trump’s possible actions. "India benefits from relatively low trade exposure to the US, manageable leverage, and a particularly low and declining level of foreign equity ownership," he suggested.

Veteran investor and CIO of 3P Investment Managers Prashant Jain, in his recent newsletter had also said that India could be at advantage with Trump coming to power.

“Given the composition of India’s economy, with high consumption accounting for approximately 70 percent of GDP and low manufacturing exports at just 12 percent of GDP, India should not be disadvantaged,” said Jain while further suggesting that India’s geopolitical status and strong relations with the US, could further enhance India’s ability to navigate potential challenges.