By Prasenjit Paul
The world trade war that began in early 2025 is showing no signs of slowing down. Initially, the buzz was that the US would primarily target China with massive tariffs, which would end up working in favour of India. But after months of US-India trade talks going nowhere, something else happened.
The US slapped a 25 per cent tariff on Indian goods, and then quickly doubled it with another 25 per cent. Talks are expected to restart soon, but for now, the equity markets are stuck dealing with all the uncertainties.
Back home though, India’s bigger picture still looks solid. Our strength lies in a massive domestic market that runs more on local consumption than exports. And on top of that, four robust reasons to remain positive: lower GST and income tax rates, lower interest rates due to repo cut, favourable monsoon, and the possibility of softer global oil prices in the coming months.
Altogether, these factors present compelling reasons to bet on selective segments despite all the global uncertainties. For investors, the key will be to remain selective and target the correct sectors as below to weather the storm.
Hospitals
The hospital segment’s supply-demand equation does not hinge on world trade. People do not delay essential treatments due to tariffs or trade wars. Therefore, hospital stocks are one of the most reliable bets in times of uncertainty. Increasing awareness, GST exemption on health insurance, and insurance penetration are creating tailwinds in the industry. Hospital chains such as Apollo Hospitals, Max Healthcare, Yatharth Hospital, Rainbow Children’s Medicare, etc. are increasing bed capacity and benefiting from this structural growth.
Diagnostics
Diagnostics is another industry that remains largely protected from world trade. From periodic health check-ups, preventive tests, to specialised diagnostics, these services have now become a regular part of people’s routines. Even in tough economic times, diagnostic chains usually do not see their cash flows drying up. Vijaya Diagnostics, Dr. Lal Pathlabs & newly listed Suraksha Diagnostics are riding tailwinds.
Auto Ancillary
The automobile industry has quite a few tailwinds in its favor in the upcoming months. The government recently reduced GST on cars, and most auto manufacturers also slashed price just before the festivities to pass on GST benefits. On top of that, the RBI cut repo rates in 2025, which has reduced the cost of car loans, and the income tax reduction in FY25 has left consumers with a bit more cash to spend. Add all this together, and car sales are going to get a good boost in the months ahead.
Rather than attempting to select one or two automobile companies, a better way to ride this wave may be through auto ancillary stocks, the component manufacturers that supply to nearly all OEMs. When automobile sales increase, these players win across the board.
Power Transmission
India is aggressively promoting installation of renewable energy, which translates into huge investment requirements in transmission infrastructure. Firms that derive the majority of their revenues domestically are riding this wave. Meanwhile, those that sell to non-US markets such as Africa and the Middle East are protected from the current tariff war & enjoying the electrification ride in Africa. The combination of local demand, export markets, and competitive standing makes power transmission one of the promising segments to follow.
In summary, by being selective, an investor can reap benefits from the domestic tailwinds present in the Indian market amid global trade uncertainties.
(The author is an equity analyst at Paul Asset and the fund manager of 129 Wealth Fund. He is also the author of ‘How to Avoid Loss & Earn Consistently in the Stock Market’ and ‘Multibagger Stocks’)
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