India Inc Braces for Trump’s April 2 Tariffs: Key Sectors & Stocks to Watch

By csvt4256

Published on:

As the April 2 deadline for US reciprocal tariffs approaches, Indian businesses and investors are assessing the potential fallout. Sectors like automobiles, pharmaceuticals, gems & jewellery, and IT services are under scrutiny, with some facing higher risks than others.

Here’s a detailed breakdown of the most vulnerable industries, potential winners, and stocks to monitor amid the escalating trade tensions.


1. Pharmaceuticals: High Exposure but Resilience Expected

Key Insights:

  • India supplies over 40% of generic drugs to the US, making pharma a critical export sector.

  • Current tariffs: US imposes near-zero duties on pharma imports, while India charges ~10% on US-made drugs.

  • Risk assessment: While tariffs could squeeze margins, complete disruption is unlikely due to India’s cost advantage.

Expert Opinions:

  • Kranti Bathini (WealthMills Securities):

    • “Indian pharma’s dominance in generics ensures long-term stability despite short-term volatility.”

  • Mehul Sheth (HDFC Securities):

    • “Companies may exit low-margin products to mitigate tariff impacts.”

Stocks to Watch:

CompanyUS Exposure
Sun PharmaLeading player in US generics
Cipla~$200M revenue from North America
Lupin$200M+ ongoing US projects

2. Gems & Jewellery: A Vulnerable Export Giant

Key Insights:

  • India exports ~$10B+ in gems & jewellery annually, with the US as a major buyer.

  • Potential risk: If tariffs rise, profit margins could shrink for exporters.

  • Silver lining: India’s role in the global supply chain may soften the blow.

Stocks to Watch:

CompanyUS Presence
Rajesh ExportsSignificant US retail footprint
Kalyan JewellersExpanding in North America
Malabar GoldStrong export reliance on US

3. Electronics Manufacturing (EMS): Indirect Risks, New Opportunities

Key Insights:

  • US-China trade tensions are pushing global firms to diversify supply chains.

  • India’s incentive schemes (e.g., PLI for electronics) could attract investments.

  • Potential winners: Companies with US partnerships or expansion plans.

Stocks to Watch:

CompanyUS Strategy
Dixon TechTargeting $100M+ US exports
Kaynes TechEyeing US for FY26 revenue growth

4. Metals: Limited Direct Impact, But Chinese Dumping Looms

Key Insights:

  • Low US exposure: India’s metal exports to America are minimal.

  • Indirect risk: If China diverts excess steel/aluminum to India, domestic prices may crash.

  • Safeguard duties needed to prevent dumping.

Stocks to Monitor:

CompanyExport Reliance
HindalcoDeclining US shipments
Jindal SteelMinimal dependence on exports

5. IT Services: No Direct Tariffs, But Client Spending at Risk

Key Insights:

  • No direct tariff threat (IT is service-based, not goods).

  • Potential risk: If US firms cut budgets due to trade wars, Infosys, TCS, Wipro could see slower growth.

Expert Take:

  • Ajay Bagga (Market Analyst):

    • “IT may remain insulated unless trade tensions severely impact US corporate spending.”


Final Outlook: How Should Investors Prepare?

High-Risk Sectors:

✅ Automobiles (Already hit by 25% tariffs)
✅ Gems & Jewellery (High export dependence)

Moderate-Risk Sectors:

⚠️ Pharma (Margins may shrink, but demand remains)
⚠️ Electronics (Opportunity if supply chains shift)

Low-Risk Sectors:

🛡️ IT Services (Minimal direct impact)
🛡️ Metals (Unless Chinese dumping occurs)

Strategic Moves:

  • Diversify portfolios away from high-tariff sectors.

  • Watch for policy shifts (India may negotiate concessions).

  • Long-term bets on sectors with domestic demand resilience.