Although the United States is not aware of how strong the Indian economy is, American investment banks and economic agencies are well aware of the market they currently have. America also needs the market as much as Europe. That is why when US President Trump repeats the imposing tariffs on India. Then another voice comes from their own country that it will not have much impact on India.
This prophecy is made by S&P Global Ratings, one of the world’s largest rating agencies. Rating agencies believe that US reciprocal tariffs will not have much impact on India. The agency estimates that India’s trade surplus could have some impact. Let us also tell you what kind of prediction the American Rating Agency has predicted.
What was the prophecy?
S&P Global Ratings on Thursday said India’s limited trade tariffs with the United States reduce the risk, but indirect effects such as business regeneration in the country could affect steel and chemical sectors. The agency’s report states that India’s risk for US tariffs 25 percent on aluminum and steel is 4.5 percent, lower than South Korea’s debt of 4.7 percent, the highest in Asia-Pacific economy. India’s exports to the United States are 2.3 percent of the total GDP.
Why not affect?
In addition, India’s growing trade surplus with the United States can make it sensitive to tariffs. Because the United States has announced the imposition of mutual tariffs on its trade partners. However, the indirect effects of this tariff, such as a downturn in global development, are likely to have a less impact on India. The report states that India’s export sector accounts for more than 10 percent of the total GDP in the country. The rating agency also said that Indian companies with most rating are capable of temporary income recession. Companies of the country also benefit from strong infrastructure and growing economy supported by consumer expenses.
Economy and inflation forecast
According to S&P Global Ratings, India’s economic growth rate is estimated at 10 basis points in FY25 to 6.7 percent, which was 6.8 percent last year, but will continue to grow fastest in Asia-Pacific. The growth rate is expected to rise to 7 percent in FY 27. India’s average inflation will also fall to 4.4 percent in the financial year 25, which was 4.6 percent in the financial year 24, and will rise again to 4.6 percent in FY 26. The rating agency said that due to inflation declining, the policy rate is likely to be reduced to 5.5 percent in the fourth quarter of FY 25.