New Delhi: Veteran emerging-markets investor Mark Mobius has discounted the severity of new U.S. tariffs on India, highlighting the country’s robust domestic market as a buffer and emphasising long-term growth potential.
Domestic strength cushions tariff blow
Mobius, chairing the Mobius Emerging Opportunities Fund, stated that India’s large consumer base provides a cushion against external shocks, unlike export-heavy economies such as China. He added that India’s booming software exports remain mostly unaffected by the tariff hikes. He pointed out that shipments worth over $30 billion—including pharmaceuticals, smartphones, semiconductors and energy—are currently exempt, offering critical protection for key sectors.
Growth outlook remains positive
According to Mobius, India’s sustained GDP growth of 6–7 percent—despite global uncertainties—is indicative of a resilient economy capable of weathering tariff-related turbulence. He noted that India has ascended to become the world’s fourth-largest economy, a reflection of its steady economic progress.
Limited downside, with strategic diversification
Mobius estimated that the cumulative tariff impact could shave between 0.5 and 0.75 percentage points off India’s GDP. However, he maintained that a massive domestic market and strategic exemptions will keep overall damage in check. He is reducing his India cash portfolio to 25 percent, signaling prudent caution but not retreat.
Strategic takeaways for India
With markets in flux, Mobius suggests India accelerate reforms to capitalise on slowly shifting global supply chains. He urged policymakers to streamline regulations and ease bureaucratic hurdles to attract foreign investment and enhance competitiveness.