What should Indian investors do in the middle of the US recessions? Experts share tips when the tariff war escalates

Last updated:April 05, 2025, 13:12 is

Analysts say that this market environment is ideal for investments by SIPs in investment funds. In sectors, investors should avoid metal and other cyclical sectors; And focus on FMCG, finance and pharmaceutical.

According to the “mutual tariffs” imposed by US President Donald Trump in the countries, analysts expect the US’s economy to fall into a recession.

Even if the fears of a recession in the US economy in the middle of the tariff war are deleted, analysts indian investors advise to stay careful and not in panic. They said this market environment was ideal for starting investments by SIPs in investment funds. For stock -specific investors, the analysts said that they should avoid it and metals from now on and concentrate on FMCG, pharmaceutical and finance, since these sectors show relative strength.

“In the continued fear of a recession, Indian investors are recommended to remain careful, but not in panic. It is important to maintain a balanced approach in the current market scenario,” said Swapnil Aggarwal, director of VSRK Capital.

US President Donald Trump imposed on Wednesday in the countries, including 27 percent in India, in the USA from April 9th. The analysts then expect the US’s economy to fall into the recession.

US recesses fears: What should Indian investors do?

Analysts advise Indian investors to stay careful and not panicked during the current market environment. They suggest that sectors such as IT and metal should now be avoided in the middle of the US fear of recession.

Swapnil Aggarwal from VSRK Capital said that it was advisable for Indian investors to avoid sectors such as IT, metals and other cyclical stocks for the time being, as they may remain under pressure.

The focus should be on sectors such as FMCG, pharmaceuticals and finances that currently have relative strength and resilience, he added.

“For long -term diversification, NIFTY Junior (NITTY NEXT 50) and NIFTY ETFs are good options, although you may be able to experience short -term volatility. This market environment is ideal for starting investments in investment funds, which can help navigate the volatility and steadily build with the prosperity,” said Swapnil.

Vinod Nair, research manager, Geojit Investments LTD, also said that after the introduction of tariffs with higher than expected tariffs in the USA, sectors such as IT and metals in relation to the wider market under the direction of the broad market are reflected in the direction of the wider market for the US economy and potential retaliation lawsuits by other countries.

“It is expected that investors are closely monitoring all countermeasures carried out by global trading partners, which could further worsen the geopolitical and economic uncertainty,” added Nair.

Jitendra Sriram, Senior Fund Manager at Baroda BNP Paribas Mutual Fund, said: “We may not see the profit as a direct effects of tariffs, since the potential industries/companies may not be significant index components, but the effects of second order due to slower economic growth in the USA itself cannot be excluded.”

The effects on the second order put a strain on the mood in areas such as IT services. These are likely to be powered by the trend towards discretion expenditure in the United States, he said.

“The tariffs are negative in the margin, with incremental negatives in industrial / device exports, chemicals, textiles and fisheries may occur,” added Sriram.

The way we would approach this is to look at sectors that are more domestic than those who are exposed to more export. However, there are certain sectors such as energy (oil marketing companies) that are positively influenced by areas such as softer crude oil, he said.

After the US tariffs, the Indian markets pushed under strong pressure and took back almost one and a half percent, which was largely weighed up by weak global clues. After two days of poor movement, the Nifty slipped under his important support from 11:100 p.m. on Friday and continued to drift down, finally settled at 22,904.45. Most sectors experienced considerable pressure, with metals, pharmaceuticals and energy being the worst actors. The broader indices that had exceeded in the previous sessions saw a sharp correction that fell between 3% and 4%.

The Trump tariffs and the US recessions fear

US President Donald Trump imposed “mutual tariffs” in the United States in the USA on Wednesday from April 9, including 27 percent in India.

Although the pharmaceutical sector has so far been left out by the tariffs, Trump has indicated possible trade measures in the sector: “Pharma, I think, becomes a level that they have never seen before”.

Analysts expect the US economy to face the recession. JPMorgan Chase & Co said that the US economy falls into recession this year after the tariffs have announced the Trump administrations.

“We now expect that a real GDP under the weight of the tariffs, and for the entire year (4Q/4Q) we are now looking for a real GDP growth of -0.3% after 1.3% before,” said Michael Feroli, the head of the US economist of the bank, on Friday in a note to the customers who relate to the boss inspection. “The forecast contraction in economic activity is expected to be the attitude and over time to increase the unemployment rate to 5.3%,” said Feroli.

It is important that according to Trump’s tariff announcements, China also announced 34 percent for US imports with effect from April 10.