US President Donald Trump’s decision to waive sanctions, restrictions and duties under a new Russia sanctions law has eased an immediate tariff threat for India, offering a sentiment boost to domestic equities. However, market experts believe investors should not interpret the move as a lasting reprieve as it leaves room for further developments after the mid-term elections.
‘Sentimentally positive’, but policy uncertainty persists
Madhavi Arora, chief economist at Emkay Global, described Trump's decision as sentimentally positive for India. However, she cautioned that the US President's changing stance on Russia, alongside his approach towards India during his current term, leaves room for further developments after the midterm elections.
The waiver gives India breathing room, but does not necessarily signal a permanent retreat from Washington's tariff strategy. The administration retains the ability to revisit its position, making the durability of the relief an important consideration for investors, she added.
Market expert Sunil Subramaniam said that oil marketing companies (OMCs) could be among the key beneficiaries as the easing of sanctions-related uncertainty provides greater clarity on crude sourcing. The impact on their earnings, however, will also depend on international oil prices, refining margins and the extent to which they can access competitively priced crude.