US Tariffs Cast Shadow on India's Manufacturing Ambitions

The manufacturing sector in India is likely to face significant challenges due to new tariffs imposed by the United States, says Moody's Ratings. The US, under President Donald Trump, has announced a 25% import duty on Indian goods, effective from August 7, on top of the existing duties.

This move is expected to hamper India's manufacturing ambitions, especially in sectors such as electronics, by limiting access to the US market. The US administration has also proposed an additional 'penalty' on Indian imports associated with Russian goods.

Despite these external pressures, Moody's suggests that India's domestic demand will remain strong, as the country's economy is less dependent on trade compared to others in the Asia-Pacific region. Meanwhile, the favorable growth prospects for the services sector remain unaffected by the US tariffs.

(With inputs from agencies.)