Donald Trump’s recent announcement of potential tariffs — including a 25% duty linked to Russian oil imports impacting India — has caused a stir in trade and market circles. But Prashant Khemka, Founder of White Oak Capital, believes there’s more politics than policy in play.
“It is a negotiating tactic,” Khemka explained. “Trump is playing two cards – Russia and India – at the same time.”
In an exclusive interview with Moneycontrol, the seasoned fund manager explained how tariffs tied to Russian oil serve a dual purpose: making a statement in the Russia-Ukraine context while using India as leverage in final-stage trade talks.
India Unlikely to Suffer Long-Term Damage
Despite the aggressive tariff posture, Khemka remains confident that India will emerge relatively unaffected.
“In all likelihood, the 25% Russian oil-led tariff will go away, which would be a decent outcome for India,” he said.
Markets, he pointed out, are not currently pricing in a worst-case scenario of tariffs going up to 50%. A more realistic landing zone would be below 25%, which would keep India on a neutral or even positive footing compared to global peers.
“If duties settle in the teens or under 20%, that’s actually a win for India,” he added, drawing comparisons to how Bangladesh and Vietnam have managed similar tariff levels.
Also Read: India’s Stand on Ceasefire May Have Triggered Trump’s Tariff, Says Expert
Optics Will Matter as Much as Policy
Khemka emphasized that the perception of a win-win trade deal is just as important as the actual terms.
“It’s not just about the final deal, but how it’s seen on both sides. The rhetoric is loud, so both the US and India need to look like winners,” he said.
Not a Geopolitical Failure for India
Dismissing criticism that India might appear weak in handling Trump’s pressure, Khemka stated:
“This won’t be viewed as India failing to manage geopolitical complexity. These are just Trump’s tactics.”
Market Outlook: Expect Stability, Not Fireworks
Looking ahead, Khemka expects 2025 to be a “normal” year for the Indian stock market, without sharp uptrends or downturns.
“Markets go through phases — uptrend, downtrend, and sideways. 2025 might just stay placid,” he observed.
Despite concerns around trade tension, he doesn’t expect any major shocks for equities, unless tariffs remain elevated and affect export-heavy sectors like textiles and garments.
“At 25%, sectors like apparel and textiles will face brutal competition,” he warned.
But the broader impact on Indian equities will be limited to a narrow segment, with minimal spillover on the overall market.
Fully Invested and Bullish on India
When it comes to portfolio positioning, Khemka remains fully invested.
“We stay fully invested — both for clients and in personal capacity. Any cash inflows are deployed immediately,” he said.
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