Tariff Tantrums & Dalal Street: What Investors Should Do

There’s a lot happening on the global front these days, and if you’ve been following headlines, one thing’s clear - Donald Trump is single-handedly moving the global equity market. And when he speaks, the world watches and markets flinch. Last week, Trump slapped fresh tariffs on a bunch of imports - including some from India - and hinted that more could be coming. Just when global investors started clutching their portfolios tighter, he hit pause on most of them (China, of course, was still in the crosshairs). The result? A classic relief rally.

Markets that were tumbling suddenly bounced back, and Indian equities were no exception. But here’s the thing - what does this constant back-and-forth mean for us? Let’s break it down. Tariff wars typically make markets nervous. When the world’s largest economy gets aggressive on trade, the fear is that global growth might slow down, especially when the second largest economy too is trying to match the aggressiveness of the world’s largest economy. For India, even if we’re not the direct target, we’re still part of the global supply chain. So, Indian stocks - especially those with export exposure - do feel the heat.

But not all sectors are equally vulnerable. Pharma, for instance, had a moment of panic. But then it turned out the tariffs were aimed more at Chinese and European drugmakers, not Indian players. So, guess what? Indian pharma stocks stabilised quickly. In fact, some might even benefit if global buyers start looking for alternative suppliers outside China. In one of our special reports in this issue, we delve deep into how this can play out and how dependent we are on US exports and how a company’s share price has behaved after tariff tantrums.

Now, here’s where things get interesting. Amid all this global uncertainty, foreign investors seem to be turning their gaze towards India - not as a victim of the chaos, but as a haven. Yes, you read that right. According to recent data, global funds are increasingly parking money in Indian equities. In the last nine trading sessions of March 2025, FIIs invested more than ₹25,000 crore in the Indian equity market. Why? Because unlike many of our Asian peers, India isn’t overly reliant on exports. Our massive domestic consumption story gives us a kind of cushion. We’re like that student who scores decently in all subjects - not the topper, but super reliable during group projects.

And now, the million-rupee question - what should you, the Indian investor, do in all this noise? First off, don’t panic. If you’re a long-term investor, these global headlines are just background noise. Stick to your investment plan. Remember, investing isn’t about reacting to every tweet - it’s about riding out the waves. Our cover story this time gives detail on how to win this loser’s game. Second, don’t try to outsmart the market. Timing these volatile swings is a game best left to the fortune-tellers (and even they get it wrong). Instead, focus on building a diversified portfolio. If one sector takes a hit due to global drama, another - like consumerfocused or domestic sectors - can help steady the ship. And finally, look for opportunities. Volatility brings temporary price dips, and sometimes those dips happen in stocks with solid fundamentals. That’s your chance to accumulate. Think of it like a stock market version of an end-of-season sale. Quality doesn’t go out of style.

So, while the world obsesses over tariff charts and presidential soundbites, you do what you are ought to do. Stay calm, stay invested, and stay curious. After all, if global investors are calling India a haven, maybe it’s time we treat our own market with the same faith.

RAJESH V PADODE
Managing Director & Editor