Daijiworld Media Network - Mumbai

Mumbai, Sep 26: Despite global unease over fresh US tariffs, Indian markets are unlikely to face a steep decline, according to Manish Sonthalia, Director and CIO at Emkay Investment Managers.

Sonthalia believes that the Indian rupee has entered undervalued territory, and the broader market impact of the Trump administration’s tariffs has already been factored in.

“Some could say the Indian currency is undervalued at these levels. The negative implications of all exports, embargoes, and tariffs are broadly priced in,” he said.

He added that rate cuts likely to come in will further cushion the blow.

“If the currency is undervalued, there won’t be much impact on earnings. Couple that with rate cuts, and there could be a case to buy. There’s no case for sell, per se. The market might take time to digest the current situation, but an absolute downfall seems unwarranted,” Sonthalia noted.

Pharma faces the biggest test

The most significant concern lies in the pharmaceutical sector after US President Donald Trump announced sweeping tariffs of up to 100% on imports of branded and patented pharma products starting October 1, unless manufacturers set up production units in the US.

“All four tariff announcements today somewhat impact the Indian industry, with pharma being the largest impacted,” Sonthalia said.

He estimated the potential hit could be around USD 10 billion, with companies like Sun Pharma most exposed.

“Large pharma companies like Sun Pharma have 15–16% of revenue that is likely to get impacted. We still need clarity on whether the entire API value chain will be tariffed or just the final branded formulations,” he added.

Sonthalia’s remarks come as investors brace for global market volatility, but his outlook suggests India’s broader equity markets may stay resilient, supported by valuation comfort and expectations of policy support at home.