House View: Navigating a changing world

While the US has finalized trade deals with allies like the UK, France, Japan, and South Korea, it has sharply raised tariffs on others – imposing 50% on India and Brazil, and 39% on Switzerland. India was caught in the crossfire of US-Russia tensions, with an additional 25% “secondary tariff”. So far, the impact remains limited, as certain sectors such as generic pharmaceuticals, electronics, and energy have been temporarily exempt. Separately, tighter H-1B visa norms have added pressure on India’s IT sector. The coming months will be crucial, with the US-India trade talks underway in hopes of finalizing a broader agreement.

Highlights

• In the second quarter of 2025, among the top five economies, The US reported a strong growth of 3.8%, driven by strong consumer spending and business investment. China, too, kept growing at steady pace of 5.2%, shrugging off the impact of trade war.
• The Indian economy grew resiliently by 7.8%, driven by increased government capex, frontloading exports and strong rural demand. With this growth rate, India remains the fastest growing major economy in the world.
• Earnings forecasts for 2026 and 2027 remain among the strongest globally. This creates a favorable environment for renewed FII inflows, especially once the anticipated US-India trade deal is finalized.
• Downside risks remain – particularly in the form of earnings disappointments or a weaker-than-expected recovery in consumption.