Green Stocks Jan 8- Stocks Slump as More US Tariffs Enter Picture

Most green stocks gave up whatever little gains they had made, and then some more, as tariff clouds again hovered darker. The trigger this time is talk of 500% tariffs, which frankly are simply ridiculous, as the US market will be irrelevant for any exporter at those levels of tariffs. It is also yet another example of unilateral, ill-considered threats from the erstwhile global policeman, who seems to have morphed into a global bully under Trump. 

Specifically for the green pack, we believe attention should be centered on the long-term impact of Trump's relentless attack on green energy and its long-term implications. The attack is based on a realisation that this is an opportunity that the US has missed, and can't catch up with China, hence the need to ensure that China cannot profit as well. Detractors who track Chinese solar firms will argue that China was doing it on its own with the massive losses these firms registered in the past year, but that would look past the Chinese approach to industry dominance. It is more about employment, strategic leverage as well, something Trump has clearly set out to dismantle, climate impact be damned.   

For Indian firms and the government, it's a wake-up call to invest more in R&D over freebies, reward innovators that show progress, and continue to look beyond a transactional approach to friendships.

The stock story will be hostage to too many factors, but the ones in our control, namely the budget, should not be wasted. It's a truism in India that it takes a crisis to open up opportunities for reforms and real change, and one change we would dearly love to see is a clear shift towards R&D encouragement, over pointless mandates like CSR spends that have been gamed completely. Politicians will not love it, unfortunately. So don't count on it, but one can always hope that eventually, even they will understand the reason why the US can afford to ignore Indian views for now.

List of Green Stocks