Global brokerage firm CLSA has raised red flags over India’s investment appeal following former U.S. President Donald Trump’s remarks about imposing a 25% tariff, should he return to office. According to CLSA, such protectionist trade policies threaten India’s “safe haven” status for global investors, especially given its deepening ties with Russia and emerging friction with the U.S.

CLSA notes that India’s balancing act between the U.S. and Russia may be tested under renewed American scrutiny. This could erode investor confidence, particularly in sectors reliant on global trade and regulatory goodwill—such as pharma, IT, and electronics manufacturing.

One of the major concerns is the potential disruption of crude oil imports from Russia, which have been a significant benefit to Indian refiners. Losing access to discounted Russian oil would hurt India’s energy security, fuel pricing, and refinery margins.

The brokerage also warns that foreign institutional investment (FII) flows—already subdued in recent quarters—could further weaken due to geopolitical ambiguity and expensive valuations in the Indian equity market. Export-oriented sectors like electronics and software services may see reduced optimism under such trade headwinds.

CLSA adds that while India’s medium-term strategic relationship with the U.S. is expected to remain strong, the near-term rhetoric could dent investor sentiment and delay capital flows.