A 25 percent reduction in tariffs could act as a key trigger for a 12–15 percent upside in Indian equities, according to Chakri Lokapriya, CIO – Equities at LGT. He noted that while market valuations are currently reasonable, delays in finalising an India–US tariff agreement may continue to weigh on near-term sentiment.
Lokapriya pointed out that Indian equities are trading at around 20x earnings, which is not excessive, especially as India’s valuation premium to emerging markets remains below long-term averages. However, the absence of clarity on trade negotiations could keep investors cautious in the short run.
Looking ahead, he expects the FY27 Union Budget to focus on capital-intensive sectors, with continued emphasis on infrastructure, manufacturing, energy transition, and other areas that can crowd in private investment and support long-term growth.
Overall, LGT remains constructive on Indian markets, but believes that policy clarity on tariffs and trade, along with sustained government support through the Budget, will be critical catalysts for unlocking the next leg of market upside.
