As the world braces for US President Donald Trump’s “Liberation Day” reciprocal tariffs announcement on April 2, Samir Arora, the brains behind Helios Capital, is waving a different warning flag for Indian markets. He’s not sweating the direct US tariffs on India as much as what a wobbly US economy could mean for us.
Arora’s take? The real threat isn’t trade barriers hitting India head-on—it’s the health of the US economy and its stock markets. If Trump’s policies trip up the US, the shockwaves could rattle global markets, India included.
“The biggest risk to the Indian market isn’t tariffs aimed at us,” Arora posted on X on April 1. “It’s what happens to the US market and economy with all these tariffs, which then spills over to places like Indian IT.”
The Changing Narrative of Market Sentiment
This flips a story we’ve seen unfold recently. Not long ago, investors pulled cash from emerging markets like India to chase the US’s hot growth and juicy returns. Now, with whispers of shaky US momentum, high interest rates, and trade hiccups, the mood has shifted. A stumbling US isn’t a distant worry—it’s a real risk for India.
Why does US Market Weakness Matter to India?
The US has been slapping tariffs on countries like China, stirring up global supply chains and jacking up costs for its own companies. If that slows the US down, the ripples hit everywhere. We’re all tied together these days—trouble in the US doesn’t need to name India to mess with our businesses and wallets.
Impact on IT and Export-Oriented Sectors
Take Indian IT—it’s got a big US paycheck. If the US economy sputters or companies tighten belts, IT budgets could shrink, hitting giants like TCS, Infosys, and Wipro hard. It’s not just tech—any export sector could feel the pinch if US demand dips.
FPI and Liquidity Outflows
A shaky US market spooks investors into playing it safe. If things sour there, folks might yank money from India and park it in US treasuries, draining our liquidity. It’s like a global game of musical chairs—emerging markets can get left standing when the music stops.
Macroeconomic Linkages
The US isn’t just another player—it’s the world’s economic heavyweight. If tariffs or troubles cut its appetite for goods, global supply chains stutter, and Indian exporters—beyond just IT—lose out. Fewer orders, less growth—it’s that simple.
The Road Ahead
Sure, US tariffs on India are worth watching, but Arora’s pointing at the bigger picture: a struggling US could drag us down, too. Investors, leaders, and businesses must keep an eye on global vibes—trade moves, market swings, interest rates—to avoid this mess.
India’s got grit, but staying strong means spreading our bets and bracing for whatever the world throws our way.