Money-Wise: With Trump administration announced, here's how Indian investors should plan their years ahead

US President-elect Donald Trump and his administration are set to come into power for the second time in 2025 and this change in power has rattled not just the global but also the domestic market and left Indian investors jittery over what's next.

With Trump coming to power, India is expected to witness a shift in the foreign direct investments (FDI) inflows while some speculate that pharmaceutical companies are likely to benefit from Trump 2.0.

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Explaining how Trump's new administration can impact the Indian market, Viram Shah, Co-founder & CEO, Vested Finance told WION, "The focus will likely be on potential shifts in US trade policy. Increased tariffs on Chinese goods, for example, could lead to disruptions in global supply chains, affecting companies in India that rely on imports for manufacturing."

"Moreover, the possibility of a stronger US dollar due to protectionist measures could make US assets more attractive, potentially leading to capital outflows from emerging markets like India," Shah added.

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For Indian investors, this could signal the need to adjust their portfolios to manage these risks, particularly if the value of the Indian rupee weakens in response to a stronger dollar," he further stated.

So, how can Indian investors plan better for a more secure financial future?

This column of Money-Wise tried to understand from a market expert what should be the main focus of investors and what should they be aware of when planning their investments.

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What can Indian investors do?

Expert Viram Shah, Co-founder & CEO of Vested Finance, explains how Indian investors should strategise

• Remain focused on long-term goals rather than reacting impulsively to short-term fluctuations.
• A prudent approach to portfolio diversification and risk management will be vital.
• Balance exposure to domestic assets with careful consideration of global trends.
• Sectors that benefit from global trade and a weaker rupee might offer investment opportunities, while those that depend on global stability could face challenges.
• Sectors like IT and pharmaceuticals, which are significant exporters to the US, might benefit from a weaker rupee if the US dollar strengthens as expected.
• If inflation persists and Trump’s administration continues to push for policies that support the economy at home, the Federal Reserve may hike rates to prevent overheating. This shift could cause bond yields in the US to climb, making US Treasury bonds more attractive to global investors.
• There is also the possibility of reduced foreign investment in Indian equities, as capital flows move towards the safer returns offered by US bonds.