Can India be a security against commercial wars and tariffs?

This report comes from the “Inside India” bulletin this week, which brings timely, insightful news and market comments about the emerging power and great companies behind its meteoric growth. How do you see what you see? You can subscribe Here.

Analysts say that the key reason for these movements was the relatively insulated India economy, in which we previously discussed Last week, “Inside India. “

Morgan Stanley indicates that only 12% of India's economy depends on the export of goods. In addition, the export of goods to the USA is an even smaller percentage – 2.1% of GDP. Pharmaceutical import and energy, both of which are released from tariffs for now, and goods affecting the tariff constitute only 1.7% of India's GDP.

The honeydew chachra, the chief economist from Wall Street Bank, said that India would have the “lowest” exposure to the US among the Asian economy, and “the direct influence of higher tariffs on the demand for export will be low.”

It also seems that the country has features that could transform into a safe stop at the emerging market in the future.

For example, India's economy is based on consumers and less dependent on exports than other emerging market economies to increase growth. This means that according to experts, this is relatively well isolated from external shocks, such as trade wars.

Meanwhile, more than four fifth of the own capital market is owned in the country. Domestic investors – who regularly poured billions Systematic investment plans – They usually protect the prices of assets from the whims of foreign investors during events that worsen variability.

“The fate of the Indian capital market is mostly resolved in the country,” said Alexander Redman, the main capital strategist at CLSA.

Chachra Morgan Stanley also indicated that the last decrease in oil prices, preceding the global slowdown in growth, will probably be positive for India, given that energy is a large share in India's import account. The opposite relationship between global growth and the benefit of the Indian economy seems to be another arrow in Drok India.

India brought fuel worth $ 2,77 billion in 2022. It accounted for 38% of all imports to the country this year, according to Data of the World Bank.

“A slower global growth often leads to lower global prices of goods, which can be seen in the decrease in oil prices by 22% YTD, which positively affects the conditions of India trading (because India is the importer of the net)” – added Chachra.

A long decline on the stock market, which preceded the presidential election in the USA and was caused by fears of lofty valuations, also reduced share prices to more leveling levels.

“India has the most negative (profit per share) changes … on emerging and developed markets, except for Indonesia,” said Redman of CLSA.

According to FactSet data, the analysts transferred profit per share at 60% of companies in the MSCI India index, compared to 55% of companies in the MSCI Emerging Markets asia index.

Perhaps this offers the floor price floor and in recent weeks softened sold -out global markets.

The question which investors may ask themselves, will these trends probably stay or will the world return to its old ways?

Inflation in India cools. The annual inflation rate of India has dropped to lower than expected 3.34% in MarchThe Ministry of Statistics and the implementation of the program was reported on Tuesday. Reading fell on the fifth of a month and was slightly below 3.61% observed in February, because the increase in food prices still soothes. Economists surveyed by Reuters expected 3.6% to read

The factory production of India slows down. The industrial production indicator, which measures factory activity, showed an increase of 2.9% in February, falling rapidly in relation to the increase of 5.2% in January. Slowdown in production and mining sectors He contributed to the inheritance, in accordance with the data of the Ministry of Statistics and the implementation of programs.

Apple accelerates iPhone shipping from India. In March, the company based in Cupertino exported 600 tons of iPhonesworth almost $ 2 billion, from India to the USA before the so -called “mutual tariffs” of US President Donald Trump, according to the Reuters report. Accordingly, Foxconn and Dad, the main suppliers of Apple in India, this month experienced an increase in export value.

Indian supplies are up to date for the best weekly results from July 2022. Nifty 50 The index increased by 4% this week, but this year the reference point dropped by 1.3%.

The 10-year profitability of Indian government bonds has dropped by 6 base points over the past week to 6.38%, the lowest since December 2021.

On CNBC TV, this week, Shilpak Ambule, High India Commissioner in Singapore, said that Sembcorp, a company dealing with the development of cities based in Singapore, “actively looks at three or four places in India” build new industrial cities. He added that the Indian government is in “advanced negotiations” with Sembcorp on these fronts.

Meanwhile, the managing partner of Chryscapital Kunal Shroff noticed that Indian companies implementing initial public offers It may be more about domestic support Compared to a decade ago, when the market was determined by foreign institutional investors.