The ongoing tariff tussle has raised concerns in several key industries—among them steel, aluminium, gems and jewellery, pharma, and tech. The Indian stock market also felt the heat, reacting sharply in the early days. While it’s showing signs of stabilising, the bounce-back has been anything but swift. While it may take a few days for a clear picture on this to emerge, as time passes, a discerning few have started to perceive a latent promise in what first appeared as pure disruption. The Indian real estate falls in this category.
Indirect impact
The Indian real estate sector has been through a turbulent phase during COVID and, despite the odds, managed to stay on its feet, weathering uncertainty with quiet resilience. It is expected to follow similar trends even in this phase.
One major reason for this is that this sector is not a key player in the export market. While it is true that the real estate does not operate in isolation. Trade tensions of this scale often lead to broader economic shifts that can affect buyer sentiment, construction costs, and investor behaviour.
Tariff wars between major economies tend to disrupt global supply chains, impact currency stability, and reduce consumer spending on large capital goods. It is natural that in this environment, residential real estate may see a slight correction in demand. However, we perceive this to be a short-term phenomenon as households will be more cautious with big-ticket purchases. This would even give fence-sitters another reason to delay their purchases, and market uncertainty could weigh in. However, the luxury segment remains steady, and for some investors, this might just be the window they have been waiting for. Homebuyers will also be keen to explore options such as fractional ownership that will help hedge their investments.
Tariffs and currency volatility
With India responding in kind on tariffs and the rupee slipping, the cost of bringing in materials from abroad is climbing. Projects that count on imported materials could start feeling the pinch and would have to resort to stretching their budgets or adjusting prices. That said, India’s manufacturing base has come a long way, and many developers are now turning to high-quality domestic alternatives to keep projects on track. This shift is encouraging innovation and local sourcing—particularly in segments where design flexibility allows it. While luxury real estate still demands premium finishes, the growing strength of India’s homegrown suppliers means developers aren’t without options.
Imported materials and cost inflation
While India sources most of its basic construction materials, such as cement, sand, and bricks domestically, high-end and commercial real estate projects rely heavily on imported components. Materials like top-grade steel, specialised aluminium, glass facades, HVAC systems, elevators, and high-end finishes are often sourced from abroad for their quality and look. With import duties climbing and the rupee losing ground, these essentials are getting pricier. That’s likely to push up construction costs, especially in luxury homes and commercial spaces. Over time, some of that added cost may trickle down to buyers, which could make properties less affordable and soften demand.
Ray of hope
Even though the times are uncertain right now, there is cautious optimism about the ongoing Bilateral Trade Agreement (BTA) negotiations between the US and India. Tensions may ease and tariffs may be reduced or rolled back if these talks are successful. In addition to stabilising material costs for the real estate sector, this could reassure investors and developers. However, the developers are observing the situation with caution and are hopeful that there will be little or no impact on the schedules and budgets of the ongoing projects.
Policy support at home
The Indian government has always taken proactive steps to assist the real estate sector and this time is no different. The Union Budget shared in 2025 is set to provide support in the form of tax breaks, infrastructure spending and housing development-promoting policies. These initiatives will maintain the buoyancy of the sector, especially in the second-home and affordable housing. To help the buyers, RBI recently also announced a further cut in the repo rate. As a result, there has been a reduction in home loan rates, which will possibly result in drawing more investors into the market.
As global trade policies shift, India’s real estate market is holding steady, though keeping a close eye on developments. It may not be directly caught in the tariff crossfire, but rising input costs, a fluctuating rupee, and cautious buyers could create a few bumps along the way. Even so, the sector is grounded in solid local demand, continued government backing, and the hope that global tensions might ease, keeping expectations measured but hopeful for the near future.
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