The shares of export-oriented shrimp feed and textile companies rose on September 8, buoyed by multiple factors. This comes following strong volatility after Donald Trump-led US administration increased tariffs on Indian imports to a whopping 50 percent.
Pearl Global Industries shares surged more than 5 percent to trade at Rs 1,268 apiece, while KPR Mill shares gained around 2 percent. Gokaldas Exports shares jumped nearly 4 percent, while Vardhman Textiles shares were up over 1 percent.
Avanti Feeds shares jumped more than 2 percent, while Apex Frozen Foods shares were up around 1 percent. Coastal Corp shares gained nearly 3 percent, while Waterbase shares were up more than 2 percent.
Here are the likely triggers for the uptick in the share prices.
Trump softens stance on India:
United States President Donald Trump recently described India-US ties as a “very special relationship”, adding that he would “always be friends” with Prime Minister Narendra Modi. “I will always be friends with (Narendra) Modi… He is a great prime minister. He is great. But I just don’t like what he is doing at this particular moment. But India and the United States have a special relationship. There is nothing to worry about. We just have moments on occasion,” Trump said in the Oval Office on September 5.
Speaking on the massive tariffs imposed on India, Trump said, “We put a very big tariff on India- 50 per cent, a very high tariff. I get along very well with (PM) Modi, as you know. He was here a couple of months ago, in fact, we went to the Rose Garden and had a press conference.”
PM Narendra Modi on September 6 said he deeply appreciated and fully reciprocated US President Donald Trump’s positive assessment of India-US ties. Modi stressed that the two countries share a very positive and forward-looking Comprehensive and Global Strategic Partnership.
The exchange came days after Modi met Russian President Vladimir Putin and Chinese President Xi Jinping at the Shanghai Cooperation Organisation summit in Tianjin. Following the meet, Trump wrote that the US had “lost Russia and India to deepest, darkest China”.
FM Sitharaman promises support:
Finance Minister Nirmala Sitharaman said that the Centre is preparing a relief package to help exporters bear the impact of the steep 50 percent tariffs imposed by US President Donald Trump.
“We cannot leave our exporters high and dry saying the situation will change sooner, we will work with them,” Sitharaman said in in an interview to Network 18 Group Editor-In-Chief Rahul Joshi on September 5. She added that the package, awaiting Cabinet approval, will support industries hit hardest by the duties, as suddenly finding new markets is challenging.
Indian exporters to lobby RBI for weaker rupee to offset US tariffs:
Several Indian exporters are set to request RBI to allow them to temporarily convert proceeds from their US business at a rupee rate that is 15 percent lower than current levels, Bloomberg reported. This will help cushion some of the impact from the US tariffs.
The businesses will make their case to RBI Governor Sanjay Malhotra at a meeting next week, the report cited Engineering Export Promotion Council of India Chairman Pankaj Chadha as saying. They are facing a loss of about 30 percent in US-bound shipments because of the higher tariffs, and they want the government to shoulder at least half of the burden, he added.
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