India will be ‘modestly’ hit by new US tariffs, Moody’s says

The Indian economy will be modestly hit as a raft of new US tariffs reverberate globally, Moody’s Ratings said in a report on Wednesday, assessing tariff effects on global economies’ creditworthiness.

The agency revised India’s gross domestic product (GDP) growth estimate to 5-6.5% for 2025, down from 6.6% previously.

Moody’s noted that new US tariffs would negatively affect many Asian companies. However, India’s diverse exports to the US will limit its exposure when compared with economies such as Vietnam, Cambodia, and Thailand, which depend heavily on US exports.

Despite a 90-day tariff pause announced by the US, Moody’s warned that tariffs would weaken credit conditions, increasing defaults beyond earlier expectations.

The tariff impact will be particularly negative for banks in Vietnam, Thailand, and Bangladesh due to their export reliance on the US.

China’s growth will slow without significant fiscal stimulus, the report said.

Japan and Korea face exposure to US vehicle tariffs, but increasing local production in the US can help mitigate these impacts.

On 9 April, the US set a 90-day pause on most tariffs, imposing a 10% universal rate except for China, where tariffs increased to more than 100%.

Tariff announcements have unsettled global financial markets and raised recession risks.

Moody’s emphasized that the ongoing uncertainty would hinder business planning, stall investments, and weaken consumer confidence.

Tariffs will broadly reshape sector risks and unevenly affect sovereign and sector credit profiles, it said.