Fund managers say tariff shock may spur important economic reforms in India

The tariff shock from the US has rattled Indian exporters, but some fund managers believe the disruption could be just the push India needs to make overdue economic changes.“I think it’s time to probably think inwards and start doing the reforms,” said Pankaj Tibrewal, Founder and CIO at Ikigai Asset Management. He called it a wake-up call for both policymakers and industry.

Tibrewal estimated that the potential export impact — excluding pharma and electronics — could be around $18 billion, or roughly 0.4% of GDP. He said the focus now should be on how to offset that. “How do you negate that? It should be the brainstorming which should be happening among corporate India as well as government,” he said.

Sridhar Sivaram, Investment Director at Enam Holdings, echoed that sense of urgency.
“I hope the government wakes up, because we haven’t seen any reforms in this part this term. So hopefully it’s overdue,” he said. He added that something may be in the works.Sunil Singhania, Founder at Abakkus Asset Managerstruck a more measured note, saying the worst of the uncertainty may be behind us.

“It is better to let things settle down… I’m very sure the end is pretty near, at least in terms of clarity,” he said.

He added, “Once this tariff issue is sorted, we can see a resurgence of optimism, both in the economy as well as corporate profit base.”

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