As the US imposes punitive tariffs on over $60 billion of Indian exports, investors are left grappling with the implications for their portfolios.
In an interview with Invezz, Bill Mann, Chief Investment Strategist at Motley Fool Asset Management, outlined a proactive approach to navigating this turbulent landscape.
“For investors, this isn’t a reason to panic-sell; it’s a reason to focus on resilience,” Mann said, emphasising the importance of investing in high-quality companies with pricing power.
With critical sectors like textiles and gems facing potential export collapses of up to 70%, the stakes are high for India, which has become a focal point in US trade policy.
A sought-after public speaker and commentator, Bill’s expertise spans a wide range of industries.
His deep understanding of corporate governance issues led him to testify as an expert witness before the US Senate Committee on Commerce, Science & Transportation, regarding the collapse of Enron.
Mann cautioned against overreacting to tariff-induced volatility, suggesting that opportunities exist in technology and energy infrastructure.
“We’re seeing a surge in demand for power generation and transmission capacity,” he noted, highlighting sectors that could benefit from the ongoing energy buildout.
The strained US-India relationship, marked by these tariffs, poses challenges for bilateral trade and investor confidence. However, Mann believes that companies capable of adapting to shifting trade flows will thrive.
At Motley Fool Asset Management, we focus on companies that can compete globally, regardless of policy twists.
As global GDP growth is projected to slow to around 3.0% in 2025, Mann’s insights offer a roadmap for investors looking to capitalise on resilient markets while navigating the complexities of international trade.
Edited excerpts:
Strained trade relation
Invezz: How will the US tariffs affect India’s GDP and critical sectors like textiles and gems?
Of more than $86 billion in goods exported from India to the US, more than $60 billion are now subject to punitive tariff rates.
A New Delhi-based think tank called The Global Trade Research Initiative predicts that segments like textiles and gems could suffer as much as a 70% collapse in exports to the US, as these industries have not received any tariff waivers, unlike other segments such as pharmaceuticals.
Invezz: How might tying tariffs to India’s Russian oil purchases reshape global trade, especially for competitors like China or Vietnam?
China and Vietnam will remain highly interested in this outcome. India has been a favored destination as foreign companies have looked to both India and Vietnam as viable manufacturing alternatives to China.
Invezz: How might strained US–India ties influence investor confidence and bilateral relations?
Since the aftermath of “Liberation Day” in April, American investors have taken the threat of tariffs in stride.
The Trump administration has pointed to trade imbalances being driven by policies that favor global competitiveness over domestic consumption.
It’s remarkable that it is India, rather than Russia or China, where the US has drawn the hardest line.
Investment strategies
Invezz: How should investors adjust portfolios to manage risks from the 50% US tariffs on $60 billion of Indian exports, especially in textiles and gems? Any recommended asset classes or regions?
Of the $86 billion in Indian exports to the US, $60 billion is now under tariffs, and industries like textiles and gems could see exports collapse by as much as 70%.
We believe that, for investors, this isn’t a reason to panic-sell; it’s a reason to focus on resilience.
Our philosophy is to stay invested in high-quality companies with pricing power.
We’re cautious on tariff-sensitive consumer goods but see opportunities in technology, energy infrastructure, and companies positioned to benefit from AI-driven demand for power.
We believe that volatility here is not something to fear; it’s where active managers can find value.
Invezz: With global GDP growth projected to slow to around 3.0% in 2025 due to trade tensions and policy uncertainty, how should investors position themselves to capitalise on resilient markets like India, despite the US tariffs impacting $60 billion of its exports?
You have to ask why India is a preferred soft target for US sanctions.
For many reasons, the Indian economy is less export-oriented and more domestically focused than many other countries in Asia, especially China and Vietnam.
Still, Standard Chartered suggests that if these tariffs remain, it could impact the Indian economy by as much as 1% of GDP.
That’s a devastating contraction.
Will India open up its agricultural market as the US is demanding? Will it choose to align itself with the US or with China and Russia?
For better or for worse, the Indian stock market, writ large, hasn’t really overreacted.
Our preferred way to invest in the growth of countries around the world is through companies that have the opportunity to capitalise on trends that we believe should be more immune to macroeconomics.
US technology leaders like Microsoft offer high-quality opportunities to benefit from growth in India, with its cloud services arm, Azure, growing at a 34% annual rate.
Energy and trade
Invezz: Energy Market Impact: With tariffs tied to India’s Russian oil purchases potentially spiking Brent crude prices, how might this affect investor sentiment in energy-intensive sectors or create opportunities for US energy firms?
The tariffs are closely tied to India’s Russian oil purchases, which highlights how energy remains at the center of global trade tensions.
While this creates uncertainty for energy-intensive industries like transport and manufacturing, it also reinforces the opportunity for US energy and infrastructure companies.
We’re seeing a surge in demand for power generation and transmission capacity, with equipment backlogs stretching years and pricing power firmly in suppliers’ hands.
At Motley Fool Asset Management, we view these bottlenecks not as risks to avoid, but as catalysts for companies positioned on the right side of the energy buildout.
Invezz: How will targeting India with tariffs impact its competitiveness versus Vietnam, and what does this mean for US-India trade talks?
These tariffs deliberately hit Indian industries without waivers, leaving pharmaceuticals untouched while weakening sectors like textiles. That opens the door for Vietnam and China to capture market share.
At Motley Fool Asset Management, we don’t try to guess every policy twist; instead, we focus on companies that can adapt and compete globally, regardless of shifting trade flows.
Inflation
Invezz: Given forecasts of uneven global inflation and rising bond yields in 2025, how can investors navigate tariff-induced price pressures and market volatility to identify opportunities in sectors like technology or sustainable energy?
Why are we presuming that tariffs will be inflationary?
There is a long history of trade protection in countries like India through the 1990s and Japan up until a few years ago that suggests the exact opposite is just as likely.
The US tariff regime is in place to reorder global trade, which, as a direct byproduct, could mean that massive amounts of capital resources will be stranded, particularly in China, which has the largest concentration of manufacturing assets on the planet.
Stranded or poorly returning capital assets of a sufficient scale are deflationary in nature.
Couple that with the OPEC unwind of more than 2 million barrels per day of voluntary production cuts, and it is possible that these dynamics do not support inflation.
Our philosophy at Motley Fool Asset Management isn’t really about navigating pressures that may or may not come to pass; rather, it’s about finding companies that have characteristics that should help them succeed regardless.
For example, we have very little exposure to sustainable energy because our questions around the long-term profitability of the space are too substantial.
Instead, we’ve focused on construction and services companies that specialise in energy infrastructure.
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