Trump Tariffs Turmoil Spurs Shift To Domestic-Focussed Companies Amid Global Volatility

As Donald Trump wages a trade war on most of the world, brokerages are moving towards domestic-facing companies and ones with less exposure to the US. The aggressive trade policy, announced on April 2, introduces a 10% baseline tariff across all nations, with higher rates—up to 49% on countries like Cambodia and 34% on China.

As tensions mount, China has already retaliated with a 34% tariff, banned imports from certain US companies, and announced export controls. With global volatility here to stay, brokerages are now recommending a strategic pivot toward companies with minimal international exposure.

Keeping these points in mind, Macquarie has made changes in its 'Super 6' buy list to feature domestic businesses better insulated from external shocks.

The brokerage has added domestic-facing names like Bharti Airtel Ltd., UltraTech Cement Ltd., and GAIL (India) Ltd., while dropping global players such as Sun Pharmaceutical Ltd., Tata Motors Ltd., and Wipro Ltd. Bharti Airtel is seen as a “flight to safety” stock, while UltraTech is well-placed within the cement cycle, and GAIL could benefit from upcoming tariff hikes.

Meanwhile, Motilal Oswal’s note underscores an overweight stance on large-caps and domestic-facing names. Among its top picks are Reliance Industries Ltd., Bharti Airtel Ltd., ICICI Bank Ltd., Larsen and Toubro Ltd., Tata Consultancy Services Ltd., and Hindustan Unilever Ltd.

In the mid- and small-cap segments, Indian Hotels Ltd., Dixon Technologies Ltd., Coforge Ltd., and Page Industries Ltd. stand out. The brokerage has also increased weightage given to HDFC Bank Ltd., Kotak Mahindra Bank Ltd. and introduced TCS, and Tech Mahindra Ltd. into its model portfolio.

Although the brokerage remains positive on technology stocks, it has moderated its position due to global uncertainties. Auto and ancillary companies with high global exposure are expected to face near-term pressure as OEMs rethink supply chains.

Vikas Khemani, the founder of Carnelian Asset Management and Advisors, believes pharma companies will stay resilient. He also said that banking and financial sectors won't be impacted by the tariff war. Khemani also made a case for India's labour cost advantage.