India has lower exposure to US tariffs than Asia-Pacific peers, says Moody’s
Moody’s Ratings on Tuesday said India has a lower overall exposure to the US market, and subsequently the tariffs, relative to others in the Asia-Pacific region, although certain sectors such as food, textiles and pharmaceutical products face risks.
Moody’s said most companies in its rated portfolio are domestic-focused with limited exposure to the US market.
To mitigate pressure from reciprocal tariffs, the US and India are reportedly engaged in talks to lower import tariffs on select US products, increase market access for US farm products and increase US energy purchases, while seeking to initiate a trade deal by the fall of 2025.
Across APAC, developing countries such as India, Vietnam and Thailand had among the widest rate differentials relative to the US, Moody’s said.
It said electronics, motor vehicles, food and textiles were the most exposed sectors. In addition to the hit from lower export demand, a key risk facing emerging economies in the region is that those aiming to nurture an export-led growth model similar to China and other advanced APAC economies will find it difficult to compete in an increasingly interventionist trade environment.
US President Donald Trump has announced he will impose reciprocal tariffs on its trading partners, including India.
The new US administration has already enacted additional 10 per cent tariffs on imports from China and 25 per cent tariffs on steel and aluminium.
Moody’s said while the US is an overall net exporter of food, feeds and industrial supplies to APAC, it is a net importer of capital goods, automotive vehicles and parts and consumer goods.
India and the US on Tuesday started working on the agenda set by US President Donald Trump and Prime Minister Narendra Modi within days of a joint declaration between Washington and New Delhi.
The US is beginning to hold talks with some leading institutions in India to discuss possibilities in research, cooperation, and commercial relationships across defence, technology, energy and critical minerals sectors, Consul General Mike Hankey said.
