The global economy is witnessing major transformations after Donald Trump came into power. According to RBI Governor Sanjay Malhotra, the present financial year started with economic uncertainty across the world, and the central bank is continuously keeping track of this situation to notice any kind of inflation risks that might arise. Donald Trump imposed high tariffs on several regions and a 26% tariff on Indian exports to the US. As a result, the global financial market has witnessed a major fall in the US dollar as well as equity sell-offs. Additionally, he expressed his rising concern about the uncertainty of the tariff, which could hit the Indian rupee and drive inflation.
After the tariff announcement, Malhotra shared his insights on the ripple impact on the Indian economy and strategies that can be adopted to help India fight this. While India is not the only country to bear the implications on its potential growth and exports, other places are also likely to face the brunt. Owing to these evolving issues in the global financial market, he has shared the need to opt for the guidance of financial advisors to navigate the uncertain period through strategic planning.
Understanding The Economic Significance
The tariffs are expected to impact India's exports in various sectors and can also slow down economic growth. Additionally, the direct hit can reduce India's foreign earnings. With exports slowing down, the industries of the country that rely on global demand can also experience lower production and, consequently, layoffs. Hence, the investors must reevaluate their portfolio and strategically place the assets with a more extended period risk-adjustment perspective. Seeking help from the expert investment advisors can be specifically beneficial in such a volatile condition. Their invaluable insights and expertise can help with customised investment strategies to align with the financial goals and the present risks to ensure the optimal return on investment in the long run.
The governor of the RBI also warned about the further trigger for the slowing of the economic growth, as businesses as well as citizens will cautiously invest the money. He mentioned that this economic volatility across the globe can significantly weigh down merchandise exports. While the accurate impacts of the tariffs cannot be stated yet, owing to the numerous other external factors, such as the ongoing Foreign Trade Agreement or FTA with the United States. However, despite all the uncertainty engulfing the economic scenario of the global aspect, the newly appointed chief is still hopeful that India will spring back from this condition efficiently with time.
What Financial Strategies Can an Investment Advisor Adopt?
As the economic landscape is complicated at the moment, an investment advisor can be of significant help. By adopting the right financial strategies, investors can secure their wealth for maximum return with certain associated risks.
Diversification of Assets: Experts can help investors with their guidance and diversify their assets in various classes like bonds, equities, and commodities, thereby reducing the risks associated with specific industries.
Choosing Domestic Sectors: The rising tariff has specifically affected the export-oriented sectors, and advisors can guide investors to focus on domestic domains that will be less affected by global trade fluctuations.
Tracking Monetary Policy Change: The RBI has reduced the interest rate by 0.25% post-tariff declaration and can further reduce it to support India’s economic growth. Hence, experts can offer guidance to strategise their investments in the changed interest rate.
Apart from the investment strategies, seeking help from a financial advisor will enable you to gain a complete picture of the economic landscape of India as well as the world. These experts stay updated with the latest news and financial developments, thereby offering extensive insights on the tariffs and changing monetary policies. These factors have a significant impact on the long-term investments and personal finances, thereby enabling you to make informed decisions on financial investments.
Final Thoughts
The newly declared US tariffs complicated the Indian economy, with several ripple effects clouding multiple sectors. In such a volatile situation, seeking the guidance of a financial advisor is not a luxury but a necessity to navigate the complexity of investments. By understanding your long-term financial goal and risk tolerance capacity, the experts can customise the investment plans for your portfolio accordingly.
Call Andii has more than 20 years of experience to offer financial and investment advisory services in Kolkata. If you are looking for an investment advisor, you can connect with us.