‘India To Attract Investors’: Mihir Vora Is Optimistic Amid US Tariff Concerns

With President Donald Trump's tariff war on trade partners, the United States has “shot itself in the foot”, as the global economic situation is not similar to the financial crisis of 2008, said Mihir Vora, chief investment officer at Trust Mutual Fund.

Speaking to NDTV Profit, Vora pointed out that while the investors flocked to the US during the 2008 financial crisis due to global inflation concerns, this time, the situation has reversed.

India's relatively insulated market is expected to attract investors, according to him.

"The point is that 70% of global equity allocations are in the US, at an all-time high. US markets have reached their peak weightage, and obviously, they've shot themselves in the foot. So, there will be a shift away from the US to other parts of the world. In fact, in the last few months, Europe hit 52-week highs, and we saw money flowing into China after the tech situation. Even if just a little bit of global money moves away from the US, India, as a small market, will be an obvious choice, primarily due to our insulation from export pressures,” he said.

According to Vora, even a $10-20 billion shift towards India could have a significant impact on the market, so he's not too concerned in the long term.

“The US will face an inflation problem. So, we are in a diametrically opposite situation to 2008. That's why I'm saying I'm not too worried with India being among the least impacted markets for exports,” he explained.

On April 2, President Trump imposed sweeping tariffs on imports from over 180 countries, including India. During a press conference, the US President defended the decision, noting that the growing trade imbalance was hurting the US economy. As a result, India faces reciprocal tariffs of 26% on its imports in the US.

Speaking about his fund strategy amid the ongoing turmoil across global markets, Vora said he will focus on domestic businesses in India, as the country's economy is expected to grow at a stronger rate than the global economy. "Before the crisis, India was expected to grow at 6.5%+ GDP for the next few years, which was already much better than the rest of the world. We're not heavily exposed to global exports, except for IT, and with the crash in commodities and oil prices, it's actually a bonus for us,” he said, adding that the company has always been positive on domestic consumption and cyclical sectors.

Vora further added that they have also maintained caution on large-cap IT due to limited growth prospects. “Even in recent market downturns, we've focused on valuations, not fundamentals. There may be pockets of overvaluation, but there's nothing we believe should be sold based on fundamentals alone,” the top executive added.

When asked about redemption pressures, Vora expressed confidence that the Indian market will be able to handle the situation due to its liquidity and stability.

"Large banks and NBFCs in India are among the safest globally, with valuations already corrected in recent years. If the crisis deepens, expect government and central bank stimulus to drive lower interest rates and liquidity. In that case, sectors tied to government spending, like infrastructure, could offer opportunities, despite their higher volatility."

Indian stock markets witnessed a major crash on Monday, with the benchmark Sensex plunging over 3,000 points and Nifty 50 nosediving to lower than 21,750 levels, amid the global turmoil over the US tariffs.