Can India's macro principles counteract Trump tariff? Rajesh Cheruvu, Cio, Lgt Wealth India explained

Expert view: As the Indian stock market is struggling with the rates imposed by US President Donald Trump, Rajesh Cheruvu, managing director and investment officer at LGT Wealth India, believes that effective policy intervention will be the key to ensure that tariff shocks do not reconsider the growth conference. While the Indian macroeconomic prospects seem promising, Cheruvu believes it is not enough to tide over the tariff-related disruptions. While the macro picture looks promising, do you think it’s enough to tide Trump’s tariff problems? While the broad macro indicators are supportive of rural consumption to a subdued phase, aided by a good monsoon, lower inflation and accommodating financial conditions-it may not fully compensate the attire of tariff-related disruptions. The potential export impact, estimated at about $ 45 billion, is significant, especially for labor -intensive sectors. However, the cushion of lower crude prices offers the center and the states of fiscal space to support the industries involved through purposeful incentives and policy measures. In this sense, the macrophoto provides resilience, but effective policy intervention will be the key to ensuring that tariff shocks do not derail growthomentum. How do you see the Indian stock market performing in the rest of 2025? Over the long history, Indian stocks broadly yielded yields in accordance with the growth in earnings and nominal GDP trends, which impede some cyclical variations. Currently, we are visible in a phase of earnings – in various sectors over the past 4-6 quarters – and this has naturally reflected in the market performance. In the short term, this mismatch between valuations and earnings can limit significant upside for the indices. That said, the bigger picture remains constructive: inflation has dropped to lows of the year, fiscal and monetary policies continue to support, and improve consumption trends. Valuations, on a forward basis, are now closer to or below long -term averages, offering a pillow. If earnings revive as the next business cycle is arrested, the market must have the space to be higher over 2025. In short, while the timing and troughs are always difficult, the environment indicates resilience with opportunities for opportunities. The key for investors is to maintain discipline in asset allocation and focus on sectors that can probably benefit from the cyclical recovery, rather than chasing news -driven rallies. What is your view on SEBI proposal to extend derivative derivatives? Retail participation in derivatives has risen sharply over the past few years, often with poor outcomes for small investors, as many studies emphasize. Sebi’s intention with proposals such as extension of contract decay is to temper excessive short -term trade and discourage speculative chewing. Longer contracts dated are less attractive to retailers looking for a quick turnaround, while still having the needs of institutional players for hedging and writing yield strategies in the needs of the needs of the hedging and writing returns. That said, extension alone may not be able to fully combat speculation; Traders can still take leverage matches, just with more extensive holding periods. The more significant impact is likely to be a moderation in retail volumes, a greater alignment of derivative activity with sincere hedging, and a possible increase in retail flow to cash shares. Liquidity in the near -futures contract can initially reduce, but over time the market depth must rebalance around the new structure. Gold was a significant outlier against equity. What relationship would you recommend for gold, stocks and any other asset class in the portfolio? Gold has indeed produced attractive long-term returns, with an average of 11-12% with lower volatility than stocks, and has proven to be a reliable diversifier, as it is largely not correlated with equity or fixed income. Investors should consult investment managers to determine their awards based on their risk profile and asset allocation. Gold is mainly used as a hedging and stabilizer, with stocks the core growth driver in portfolios, and the rest is assigned to fixed income for stability and regular income. In short, gold remains essential for diversification and risk management, but stocks will continue to anchor long-term wealth creation, and fixed income provides balance and steady revenue streams. India walked behind EMS. What does investors drive away from India to other markets? India had a remarkable run to the Kovis, which outperforms most EMS, but in the last few quarters the relative performance has deteriorated. The reasons are twofold: First, cyclical weakness in corporate earnings, and secondly, valuations that last before other EM recliners make India look expensive. As a result, world investors are tactically turning into markets that are cheaper and more sensitive to the commodity and speed cycle. That said, we consider this tendency to be temporary. With the earnings probably over the next few quarters and the macro principles of India – from domestic consumption to fiscal stability – which is still stronger than many peers, flow should normalize. In our opinion, relative underperformance can continue in the near term, but over a 6-12-month horizon, India must regain its power within the EM basket. Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or brokerage firms, not coin. We advise investors to consult with certified experts before making investment decisions, as market conditions can change quickly and conditions can vary.