'India in sweet spot': What Madhusudan Kela says on US tariff & impact on global economy

Market veteran and founder of MK Ventures Madhusudan Kela on Monday said US tariffs and trade situation don't go in a flip-flop way as the announcements made in Donald Trump first's stint as US president didn't get reverse under Joe Biden's term. "As Trump is back again, these tariffs are going to stay and I think it will disrupt the global economy, trade and the supply chain as well for sure, which is not a good news on a macro basis. The relative positioning of India is in a sweet spot and we could potentially can benefit out of this situation in the medium- to long-term," the market expert told Business Today.

Explaining the impact on India's stock market and investors in the short term, Kela said, "Foreigners hold around $900 billion in India and they have sold $30 billion, which is 3 per cent of the overall holding. Can they sell another 3 per cent if there is real global turmoil? It is entirely possible and we should not actually take that call. As an investor, I will tighten my belt and grip more on companies. We will put in a tremendous amount of work and the market will provide volatility. It will provide us excellent entry points to own companies from a long-term perspective."

The ace investor expects relentless foreign institutional investor (FII) selling to subside this year. "Trade has gone far too tilted in favour of the US. US is today around 75 per cent of the overall global markets in the world and this kind of tilt can't last forever. Foreigners should return to our market this year. I expect this relentless foreign selling to subside during this year," Kela said.

Amid this trade war situation, he anticipates certain domestic agrochemical companies with a larger base worldwide to benefit as there's "nothing negative for India" in Trump's speech.

On the rupee's fall, he said the Indian currency way ahead will depend on how the dollar behaves. "If the DXY index is 109 and if it continues to strengthen, it will mean that the rupee will weaken. If the dollar continues to rise, the rupee can weaken a little further," he stated.

He called the Union Budget 2025 "actually good" as it made perfect headlines by giving Rs 1 lakh crore in the hands of consumers, a class which was feeling most hurt because of job losses and inflation.