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Business Standard
a day ago
- Business
- Business Standard
Goldman Sachs, Bernstein, Nomura: Brokerages decode Trump India tariffs
Donald Trump's 25 per cent tariff on Indian goods triggered a sharp fall in the markets in with the S&P BSE Sensex slipping nearly 800-points in intraday deals before recovering partially. While brokerages see this as a knee-jerk reaction to the developments, they are hopeful that the final tariff will be lower – in the 15 – 20 per cent range as both countries are still trying to eke out a feasible solution. Meanwhile, here's how leading brokerages have interpreted the developments: Goldman Sachs While the surprise 25 per cent tariff announcement will likely impact earnings, if enforced, we think the incremental earnings drag would be relatively moderate. Only 2 per cent of MSCI India total revenues are derived from goods exporting sectors. As such, the direct tariff impact is relatively small, based on our baseline pass-through assumptions. Every 5 percentage point (pp) increase in US tariff rates could cause an 80 basis point (bp) incremental hit to MSCI India earnings per share (EPS) from direct and indirect channels. As such, we estimate about 2 per cent incremental hit to EPS if the new tariffs are enforced. While we are not making any changes to our EPS growth forecasts (currently at 12 per cent/14 per cent for CY25/26). Indian equities have significantly lagged broader emerging market (EM) equities year-to-date (by about 15pp); the underperformance is likely to extend in the near-term. Nomura The announced higher reciprocal tariff rate of 25 per cent, however, may be temporary, and might settle down lower. The US trade delegation is set to visit India at end-August as part of this process. Hence, the elevated tariffs announced by the US are unlikely to be permanent, in our view, although the best-case outcome would be tariffs in the 15-20 per cent range. Over the medium-term, we would still expect India to remain a beneficiary of the China plus one strategy. Higher tariffs from the US could add downside risks to the RBI's FY26 GDP growth forecast of 6.5 per cent. Already, high frequency data point to a sluggish Q2 , with subdued urban consumption, weak private capex and moderating credit growth. Higher tariffs and pressure to curb Russian energy will further drag down growth due to weaker net exports. We maintain that the Reserve Bank of India's (RBI's) rate cutting cycle is not over, despite the change in its stance to neutral. We expect 25bp cuts each in October and December to a terminal repo rate of 5.00 per cent by end-2025, with risks skewed towards further cuts. Bernstein The best news, for now, is the fact that services remains outside this ambit, a place where serious macro dents can happen. UK, EU and Japan have forged a trade deal. Indonesia enjoys 19 per cent, Japan 15 per cent while Vietnam is at 20 per cent. India is no longer attractively placed in the pecking order. The worse could well be coming, as if China somehow settles at 34 per cent, which was the original plan, this would get the India-China differential really low, simply not high enough for India to have a meaningful China+1 impact. Angel One Export-oriented stocks can underperform in the near-term. Investor sentiment till trade talks turn positive from here is expected to remain cautious. FPIs may adopt a wait-and-watch stance till further clarity comes in or their stance may lead towards a sector rotation approach. Investors (domestic & foreign) are expected to shift their focus towards domestic growth, consumption, infrastructure and financial companies that rely less on exports. PL Capital Tariff announcement is much beyond trade and has far bigger geopolitical implications on the ongoing bilateral relations between India and US since Operation Sindoor. The roots of this aggression lie in Indian denial of US role in ceasefire with Pakistan; sustained buying of Russian crude; continuous status of Russia as a key defence supplier; and growing strategic overtures of BRICS and attempts at forging a RIC (Russia, India, China) block which might disturb US geopolitical interests in SE Asia. Probability of shifting of defence procurement away from USA post Operation Sindoor, might have led to sudden imposition of tariffs and penalty. We believe this attempt by US is a bullying tactic, which has also been used against some other countries, including Canada. We expect increase in uncertainty and market volatility in the near-term. Companies that have higher US exports might see increased volatility. Domestic consumption, hospitals, select consumer, Infra, capital Goods, AMC and private banks will act as a defensive hedge during these volatile times. Barclays We do not see this 25 per cent tariff threat impacting GDP growth meaningfully, pegging the likely impact at around 30bp. We expect near-term pressure to be maintained. The rupee looks oversold in the short term. Clearly, USD-INR has bounced more than anticipated, but we think the February high of just under 88.0 remains a strong resistance level. The INR also remains cheap in both NEER and REER terms, which could mean more of an inclination from the RBI to intervene to cap weakness.
India.com
2 days ago
- Politics
- India.com
China's Incursion Into Indian Territory Continues: Beijing Silently Builts Road In Shaksgam Valley, Satellite Images Reveal
New Delhi: China has expanded a road network deep inside the Shaksgam Valley, a region that India has consistently maintained as part of its sovereign territory. New satellite images reveal fresh activity in this high-altitude zone, which lies just beyond the Siachen Glacier in northern Ladakh. The valley has remained under Chinese control since 1963, when Pakistan handed it over through an agreement India has never recognised. Shaksgam holds deep strategic importance. In 1984, India launched Operation Meghdoot to gain control over the nearby Siachen region, emphasizing the stakes in this part of the Himalayas. Spotted by open-source intelligence analyst Nathan Ruser and confirmed by researcher Nethra Desai, China's latest infrastructure move shows an extension of a road that cuts through the rugged terrain. This new stretch connects to China's G219 highway, known as the Aksai Chin road, and moves in through the Aghil Pass, which historically marked the divide between Ladakh and Xinjiang. Breaking: Amidst a thaw in China-India relations, the China have completed a new road cutting via traditional frontier pass i.e. Shaksgam Pass thereby completing a road loop. The China have now two-pronged entry to the Shaksgam valley General overview of the new developments attached (1/8) — Nature Desai (@NatureDesai) July 28, 2025 Desai, who had earlier flagged the first signs of construction in 2024, has now shared updated satellite visuals that track the progression of the road deeper into the valley. This new route indicates a calculated attempt to solidify China's logistical access to this disputed zone. The Legal and Historical Dispute The area was originally part of the princely state of Jammu and Kashmir. In March 1963, months after the India-China war, Pakistan signed a boundary agreement with Beijing and transferred the Shaksgam Valley to China. India has called this move illegal from the outset. New Delhi has never accepted this transfer and continues to assert that Shaksgam remains part of Indian territory. India's official position has been reaffirmed on multiple occasions. In July 2024, Ministry of External Affairs spokesperson Randhir Jaiswal reiterated India's stance, saying, 'Shaksgam Valley is part of India. We do not recognise the so-called China-Pakistan boundary agreement of 1963, under which Pakistan illegally attempted to cede this area to China.' Pakistan, meanwhile, has leveraged territories under its control, including Pakistan-occupied Kashmir (PoK), to deepen its strategic ties with China. The handover of Shaksgam was part of a broader effort to strengthen China's position in the region. Over the years, both countries have increased their collaboration on military logistics and cross-border infrastructure. A 2024 report by journalist Tom Hussain in the South China Morning Post pointed to Chinese plans to build new land routes through Gilgit-Baltistan. The goal, the report said, was to improve ground access for joint operations against Indian positions in Ladakh and Kashmir. Chinese infrastructure projects across Aksai Chin, PoK and now Shaksgam Valley reflect a pattern: consolidating military and logistical control over disputed border areas. India continues to monitor these developments closely, viewing them not just as violations of territorial sovereignty but as long-term moves aimed at altering the ground reality across the Line of Actual Control.
Scroll.in
2 days ago
- Politics
- Scroll.in
China has not intruded ‘even an inch' into Arunachal Pradesh since 1962, claims Centre
China has neither intruded nor occupied ' even an inch ' of land in Arunachal Pradesh since the 1962 war, Parliamentary Affairs Minister Kiren Rijiju told the Lok Sabha on Tuesday. The MP from Arunachal West Lok Sabha constituency was responding to a claim made by Samajwadi Party chief Akhilesh Yadav about Chinese encroachments in the state during a debate on Operation Sindoor. 'It is important to correct the record,' Rijiju said. '…The area China currently holds in Arunachal was already under its control either before or during the 1962 war.' 1962 के बाद, अरुणाचल प्रदेश में एक इंच जमीन चीन ने नही लिया है। #Parliament — Kiren Rijiju (@KirenRijiju) July 29, 2025 The 1962 India-China war was centred primarily along the borders in the disputed Aksai Chin region and Arunachal Pradesh. India considers Aksai Chin to be part of the Union Territory of Ladakh, while China considers the plateau a part of its Xinjiang province and Tibet. Beijing controls approximately 38,000 square kilometres of land in Aksai Chin, which is claimed by India. Border tensions between India and China had also escalated in June 2020 when a violent face-off between Indian and Chinese soldiers took place in Ladakh's Galwan Valley along the Line of Actual Control. It led to the death of 20 Indian soldiers. Beijing said that the clash left four of its soldiers dead. Following this, both countries deployed thousands of troops along with heavy artillery in the region. Since the Galwan clashes, China and India have held several rounds of military and diplomatic talks to resolve their border standoff. In October, the two countries announced that they had reached a patrolling arrangement along the Line of Actual Control, 'leading to the disengagement' of the two militaries in eastern Ladakh.
Time of India
3 days ago
- Politics
- Time of India
‘Was in Bihar holding rally': Kharge slams PM Modi's 'silence' over Pahalgam; calls for resignation of those 'accountable'
NEW DELHI: Congress President and Leader of Opposition in Rajya Sabha Mallikarjun Kharge on Tuesday launched a scathing attack on Prime Minister Narendra Modi for what he described as a lack of seriousness in responding to the Pahalgam terror attack , accusing the government of prioritising political optics over accountability. During a heated discussion on Operation Sindoor in the Rajya Sabha, Kharge criticised the Prime Minister for skipping the all-party meeting on the attack, saying, 'We attended the meeting (all-party), but you went to Bihar for election campaigning. Is that your patriotism?... He should have been in the House today and heard us. If you do not have the capability to hear, you are not capable of holding that post.' Kharge recalled the leadership shown by Prime Minister Nehru during the 1962 India-China war. 'In 1962, when the India-China war was ongoing, Nehru ji called a special session at the request of a few opposition MPs… That was our democracy. These people neither call a special session nor bring the truth to light,' he said. He also referred to J&K Lieutenant Governor Manoj Sinha's admission of a security failure in Pahalgam, arguing the responsibility should lie with the Union Home Minister. 'The Home Minister should take responsibility, not the Lt Governor,' Kharge insisted. He questioned whether Sinha's remarks were aimed at deflecting blame from Amit Shah. Kharge accused the government of repeated national security failures, citing the 2016 Uri and Pathankot attacks, the 2019 Pulwama bombing, and now Pahalgam in 2025. 'All these incidents make it clear that there is a recurring intelligence failure... Who is responsible for this? Vacate your post if you are. If not, what action is the PM taking?' he demanded. He also criticised the government for ignoring suggestions and failing to release a report on the Pahalgam incident. 'The government should come out with a report, just as one was issued after the Kargil war,' Kharge said, accusing the administration of being arrogant and dismissive towards Opposition voices. On the foreign policy front, Kharge warned against turning diplomacy into spectacle. 'Foreign policy is not 'event-baazi',' he said, adding that national security needed long-term strategy, not just showmanship. Kharge concluded by expressing disappointment in the government's attitude, claiming that while the Opposition stood united with the government on national security, Modi continued to vilify rival parties on the campaign trail. 'We stood behind the government, but Modi ji attacks Opposition parties in poll rallies,' he said. His remarks came as defence minister Rajnath Singh defended Operation Sindoor and congratulated Indian forces for killing three terrorists involved in the Pahalgam attack. Singh said the operation had been suspended, not ended, and could be resumed if needed. However, Kharge's pointed criticism ensured that questions around responsibility, accountability and leadership dominated the day's proceedings.
Time of India
5 days ago
- Business
- Time of India
A beginning but with caution: Sitharaman hints at easing India-China economic ties; says 'we need a lot more interaction'
Finance minister Nirmala Sitharaman on Saturday signaled a possible revival of India-China business relations, saying both sides have shown interest in reviving economic engagement after years of tension. Speaking at a Delhi event to mark the release of a book in honour of economist Shankar Acharya, the finance minister noted that "a beginning has been made" following external affairs minister S Jaishankar's recent visit to China. Sitharaman said stakeholders within India have been urging the government to ease investment restrictions on Chinese firms, and that Beijing has also reached out through diplomatic channels. "We need more access, and we need to have a lot more interaction, and possibly open some windows. And that's not just from our side, even the Chinese have been approaching through the MEA," she said. "There is something, some kind of a beginning, as to how much it will take us far; how far it will go is something we will have to wait and see. It might help the economy; however, a sense of caution would have to be built in," she added. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Is it better to shower in the morning or at night? Here's what a microbiologist says CNA Read More Undo Ties between the two nations soured sharply after the 2020 Galwan Valley clash in Ladakh, prompting India to impose tighter foreign direct investment (FDI) norms for neighbouring countries, suspend tourist visas for Chinese nationals, and ban several Chinese apps. These restrictions came alongside the onset of the Covid-19 pandemic. In recent months, however, both sides appear to be taking tentative steps toward normalisation. India resumed issuing tourist visas for Chinese nationals this week to advance Indian renewable projects. While China lifted its visa restrictions on Indian citizens in March. Jaishankar visited China recently, his first visit in six years, meeting Chinese President Xi Jinping as both nations work towards improving relations. The government had earlier made exceptions to allow Chinese professionals involved in key renewable energy projects to return. Sitharaman also highlighted progress in India's broader trade diplomacy, noting that bilateral trade talks with the US and European Union are advancing well. "It is bilateral trade which is taking priority over multilateral trade. On the bilateral trade front we are moving forward and we have seen bilateral agreements been signed in the last four-five years with Australia, UAE and the UK. Negotiations are progressing well with the United States as well as the European Union," she noted. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
