Why US Tariffs Are Unlikely to Affect India's Growth

The Donald Trump administration's decision to impose a total of 50% tariffs on Indian imports, including an additional 25% for India's crude oil trade with Russia, is seen by S&P Global Ratings as having minimal impact on India's economy. S&P maintains a positive sovereign outlook for India, citing its strong economic performance and limited trade-oriented structure.

YeeFarn Phua, S&P Global Ratings Director, highlighted that India's export exposure to the US is merely 2% of GDP, indicating minimal trade dependence. Key sectors like pharmaceuticals and consumer electronics remain unaffected by the tariffs.

India-US Trade Relations

In recent years, the United States has emerged as India's leading trading partner, with bilateral trade reaching $186 billion in 2024-25. India enjoys a favorable trade balance with the US, showcasing the strength and resilience of its economy amidst global trade tensions.

Despite the challenges, India's strategic position and growing domestic market continue to attract investments, reinforcing the positive outlook on its economy.