India’s macros show resilience: Rahul Bajoria sees green shoots amid tariff fears

As global markets face uncertainty, India's economic fundamentals are showing strong resilience. Speaking to ET Now, market expert Rahul Bajoria pointed out that while tariff announcements have caught attention, it is the overall uncertainty, rather than the tariffs themselves, that is affecting investor sentiment worldwide.

“From a domestic perspective, macro indicators are holding up quite well,” Bajoria said. “We’ve had a good monsoon, reasonable fiscal and monetary support, and visible improvements in activity indicators, especially in the FMCG sector. On the global front, while the impact of tariffs will continue, the level of growth uncertainty that was prevalent earlier has eased somewhat.”

Bajoria stressed that the effects of tariffs would likely become clearer in economic data toward the end of September, impacting capital spending and business planning. “Sectors focused on exports are doing reasonably well, but concerns about a slowdown will last longer than expected,” he added.


Regarding the upcoming July IIP (Index of Industrial Production) figures, Bajoria anticipates modest growth of around 2%. He attributed this subdued growth to domestic supply issues, particularly because the monsoon disrupted activities like power consumption and coal mining. “The tariff effects will be more noticeable in August and September, due to production buildup and subsequent inventory adjustments,” he explained.

When discussing sector impacts, Bajoria mentioned that labor-intensive sectors, such as FMCG, are likely to improve, while capital-intensive sectors, especially autos, may remain weak. “Domestic sectors like construction and electronics could show slight gains, but overall, supply-side weaknesses will overshadow signs of demand recovery,” he added.

Low inflation, at just 1.6% in July, should encourage discretionary spending. “When people spend less on essentials, they have more room for discretionary purchases, which is positive for the upcoming festive season,” Bajoria said. However, he warned that although sentiment is improving, it has not fully translated into activity yet.

Lastly, Bajoria commented on differences within core sectors. While steel and cement are performing well, export-focused sectors like refining are falling behind. He expects rural income growth to continue supporting labor-intensive sectors, while capital-heavy industries may show moderate performance, a trend that usually unfolds over one- to two-year cycles.