India is considered to be the most insulated market among emerging economies in relation to potential tariff plans from Donald Trump, according to Alexander Redman, CLSA's chief equity strategist.

As Trump prepares to return to the White House, his former Trade Representative, Robert Lighthizer, is expected to advocate for high tariffs on Chinese imports, which could have a significant impact on global trade dynamics.

Redman points out that India's limited trade exposure to the US acts as a buffer against external shocks, making it less vulnerable to proposed tariffs, increasing interest rates, and potential foreign divestment.

CLSA's analysis highlights India's relatively low reliance on US trade, with only 3 percent of its GDP dependent on direct exports to the US, in contrast to Mexico's 27.3 percent.

This positions India favorably in the current geopolitical climate as it navigates potential economic challenges arising from US trade policies.