Samir Arora's take on reciprocal tariffs: Unlikely to hurt bulk of Indian industries

While Arora doesn't anticipate reciprocal tariffs to have large-scale impact on Indian industries, he feels it may still change things for the auto sector.

Contrary to the consensus, market veteran and founder of Helios Capital, Samir Arora feels that the reciprocal tariffs on India, if imposed by the US, are unlikely to hurt a majority of Indian industries.

Sectors like financial services and consumer are predominantly safe from any adverse implications of US' reciprocal tariffs, however, the auto sector might still be prone to some changes, Arora said in an interaction with CNBC-TV18.

" If you look at the trade deficit, it’s easy to narrow by buying defense and oil. But even if there were no trade deficit, reciprocal tariffs might still be an issue. We need to assess where India has very high tariffs and whether reducing them slightly would be beneficial overall," he believes.

Arora is of the view that reducing import tariffs may bode well for the Indian economy rather than imposing those to safeguard interests of a few companies. "Even a year ago, when Elon Musk was discussing India, there was talk of allowing a certain number of cars in exchange for a $500–750 million investment in local assembly. This kind of arrangement is beneficial for India, it’s not just about protecting a few car or steel companies. As long as agricultural sectors aren’t harmed, lowering tariffs makes sense," Arora said.

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To illustrate his point, Arora highlighted steel tariffs. While they benefit a few steel manufacturers, they negatively impact thousands of businesses reliant on steel, including automobile, refrigerator, and air-conditioner manufacturers, as well as construction firms. "Why should we protect a select few at the expense of many? Tariffs don’t need to be eliminated, but they can be adjusted to make them less burdensome," he argued.

Arora also expressed a surprisingly optimistic view of Donald Trump, suggesting that his leadership has a positive impact on both the world and India.

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