In a significant move with global implications, U.S. President Donald Trump announced a 90-day pause on reciprocal tariffs for all countries except China on April 9. The decision comes after a volatile week in the markets triggered by a surprise 26% tariff announcement on India just days earlier.
With this temporary relief, Indian equities are poised to bounce back when markets reopen on April 11, after a holiday on Mahavir Jayanti. The pause is expected to lift sentiment across several sectors that were reeling from the tariff shock. Here’s a look at the Indian sectors and stocks that could benefit the most from this breather in trade tensions:
1. Information Technology (IT) – Breathing Room After Brutal Selloff
The IT sector has been among the hardest hit in the recent market downturn. Since April 2, the Nifty IT index has shed over 10%, reflecting investor concern over the sector’s deep reliance on U.S. revenues and fears of a potential recession.
However, the tariff pause coupled with Goldman Sachs withdrawing its U.S. recession forecast has significantly improved the outlook for tech stocks. This reversal could drive a relief rally.
2. Auto Component Makers – Possible Rebound After Slide
Auto component manufacturers saw sharp declines last week amid fears of reduced exports and higher costs. The latest pause in tariffs is expected to ease concerns and spark investor interest in the segment again.
3. Metals – Tariff Truce, China Stimulus Add Shine
Metal stocks, among the worst hit from the tariff fallout, are now likely to benefit the most from the relief. The rebound in copper and other metal prices, driven both by the U.S. pause and China’s fresh stimulus measures, adds further tailwinds.
4. Realty – Dual Boost from Tariff Pause and RBI Rate Cut
The RBI’s recent 25 bps rate cut combined with the return of positive global sentiment is expected to lift realty stocks. Lower interest rates improve affordability, while reduced external uncertainties add to buyer and investor confidence.
5. Fisheries – Relief for Shrimp Exporters
The U.S. is a critical market for Indian seafood exporters, particularly shrimp feed companies. The earlier tariff announcement had sent stocks in this segment tumbling. The 90-day relief window is likely to revive hopes for stable demand from the U.S.
6. Solar EPC Firms – Tailwinds for Clean Energy Exporters
India’s solar engineering, procurement, and construction (EPC) firms with U.S. exposure are well positioned to benefit from the tariff pause. The uncertainty had threatened project timelines and profitability, but the latest decision provides much-needed breathing space.
7. Electronics Manufacturing Services (EMS) – Apple Effect in Focus
Indian EMS companies stand to gain from Apple’s shifting supply chain strategy. Reports of increased iPhone sourcing from India to avoid China tariffs had already boosted stock prices. The continuation of tariff pressure on China, with India spared for now, reinforces this trend.
8. Textiles – Mixed Signals, but a Clear China Advantage
Indian textile exporters could emerge as winners due to the 125% tariff on Chinese textiles. However, the decision to pause tariffs on Vietnam and Bangladesh—two other key suppliers to the U.S.—may cap some of the upside for Indian players.
Expert View: A Tactical Pause, Not a Policy Shift
Ashok Chandak, President of the India Electronics & Semiconductor Association (IESA), said the tariff pause reflects a “tactical recalibration” rather than a fundamental change in U.S. trade policy.
“The temporary relief gives businesses and India vital space to stabilise supply chains and adapt operations,” Chandak noted, adding that underlying trade tensions remain due to a baseline 10% tariff still in effect.
The next 90 days are likely to shape future trade engagements between the U.S. and India, but for now, the reprieve has thrown a lifeline to several sectors on Dalal Street.
Disclaimer: This article is for informational purposes only and should not be considered as investment advice.
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