Allspring’s Prashant Paroda sees room for Indian market rebound if tariff issue eases

Indian stock markets may face short-term weakness due to higher import tariffs, but analysts see potential for a rebound if trade negotiations progress. Prashant Paroda, Portfolio Manager – Emerging Markets at Allspring Global Investments, said the recently proposed 50% tariff is “a little too high given where all the other countries are placed today.”Markets are watching the upcoming August 15 meeting between US President Donald Trump and Russian President Vladimir Putin. Paroda noted, “It might happen on August 15, during Russia and US negotiations, but it seems like a pretty high price to pay today.” A reduction in tariffs, even from 50% to 25%, could trigger “some sort of relief rally” in Indian equities.

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On the interest rate front, lower-than-expected consumer price index (CPI) inflation data has raised the possibility of a US Federal Reserve rate cut. “We would expect either a 25 or 50 basis points rate cut,” Paroda said, highlighting the Fed’s focus on both employment and inflation.However, India’s position in the artificial intelligence (AI) sector remains limited. “India is missing on the AI picture,” Paroda said, pointing out that current AI investment opportunities are concentrated in the US, Taiwan, and South Korea. While Bharti’s deal with Perplexity to introduce a Chrome competitor on its network is a step forward, domestic AI plays are still emerging.

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