Operation Sindoor unlikely to hit India’s international trade; impact on equities may be short-lived, say experts

India’s growing stature in the global economy is also a key factor in maintaining trade stability.

India’s targeted military strikes under Operation Sindoor—a retaliation to the April 22 Pahalgam terror attack—may have stirred geopolitical tensions, but experts believe the action is unlikely to disrupt the country’s global trade or investor confidence. At the other end, the timely announcement of the India-UK Free Trade Agreement (FTA) adds a layer of economic reassurance, offering a counterbalancing economic signal.

While the cross-border strikes marked a bold response to terrorism, market strategists say India’s trade relationships remain secure. "It is very unlikely to have any impact on India's international trade," said Kranthi Bathini, Director – Equity Strategy at WealthMills Securities. He said that key partners such as the UAE continue to share strong bilateral ties with India, and that “operations like Operation Sindoor are not expected to affect trade dynamics.”

India’s growing stature in the global economy is also a key factor in maintaining trade stability. “India is a much stronger and larger economy now, and also an important player in global affairs,” Bathini said, adding that past comparisons are less relevant in today’s context. “Overall, the impact on trade will be negligible.”

Similarly, Kunal Rambhia, Fund Manager at The Streets, said that India is fighting against terrorism, not a country, and that most developed nations have supported the move. "Even during similar actions in 2016 and 2019, there was no impact on business—only temporary air traffic disruptions,” he added.

In fact, the UK trade deal is being seen as a meaningful counterweight to any perceived instability. Finalised after prolonged negotiations, the Free Trade Agreement opens new doors for Indian exporters and is likely to stimulate job creation. “Its significance lies in the opportunities it creates for Indian companies to expand their exports to the UK, and vice versa,” Bathini said.

Rambhia added that it will likely boost employment and further India’s global trade integration.

Anirudh Garg, Partner & Fund Manager at Invasset PMS, said the deal supports India’s long-term export diversification strategy. “The FTA is expected to unlock new export opportunities in sectors such as textiles, pharmaceuticals, and IT,” he said. “It signals policy stability and global integration at a time when global supply chains are being restructured.”

Despite the geopolitical overhang, equity markets have so far shown resilience. Bathini pointed out that intraday movements have been choppy but not alarming. “Markets opened lower, recovered, dipped again, and then bounced back. It will depend on how tensions evolve from here.”

Rambhia said this volatility is typical of short-term reactions. “Markets tend to discount events quickly,” he said. “Such phases have often proved to be buying opportunities in the past.” Garg also said that broader fundamentals remain intact, and that the UK trade deal adds a stabilising factor for investor sentiment. “Markets often recover swiftly once clarity emerges,” he said. “This deal offers a constructive narrative amid geopolitical noise.”

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