It is not easy to make the stakeholders of a saving of $ 4,000 anxious. But that’s exactly what US President Donald Trump has done with his reciprocal price threat. From Dalal Street to Mint Street, conference rooms to political corridors, everyone is waiting for the surprises that Trump will come out of his round on April 2.
India has one of the highest weighted average tariff rates depending on the world. According to the World Trade Organization (WTO), it was 12% in 2023-24 against 2.2% for the United States.
Trump, the accomplished negotiator, has the stack on pressure. His statements on reciprocal prices are frequent. The last being on March 19, in an interview with Breitbart News, he said: “I believe that India will probably reduce these prices considerably, but on April 2, we will charge them the same rates they charge us”.
Here is an overview of what world agencies say about the impact of Trump’s reciprocal prices on India.
S&P Global: protected India
The latest report is S&P Global Ratings which indicates that a robust economy and a low exposure to the United States protect India against the effects of Trump prices. The prices are likely to have a limited indirect impact, as the export sector of India represents a little more than a tenth of its GDP.
However, there could be disturbances in certain sectors. “Low exposure to the United States of India reduces pricing risks, but indirect effects, such as commercial redirection to the country, could strike the sectors of steel and chemicals,” said S&P in a report.
The rating agency has added that most Indian companies evaluated by the latter can withstand temporary slowdown in profits.
Fitch: India slightly isolated
Fitch maintained its 6.5% projection of the GDP growth rate for India in 2025-2010. However, he warns that “more aggressive than expected” American trade policies could have a great risk for growth forecasts.
According to Fitch, “companies’ confidence remains high and loans surveys indicate continuous growth of two figures from bank loans to the private sector”, adding that India is somewhat isolated from American tariff actions “given its low dependence on external demand”.
Moody’s: sectoral impact
Companies in the automotive, steel, chemicals and commercial services in Southern and Southeast Asia are the most exposed to the prices of American Tat-Tat-Tat, which could reduce demand and increase costs, said Moody’s notes in a report. However, sectors such as mining, petroleum and gas, shipments, investment portfolio companies and proteins and agriculture are best suited to resist the impact, the rating agency said. Littles include solid internal operations, diversified supply chains and US operations.
With regard to steel and chemical companies, the pricing measures proposed by the United States will have a minimal direct impact, but would divert excess steel and petrochemicals to other markets, including Asia, adding to the already high supply in the region, according to the report. This would weaken prices and therefore reduce the profitability of these companies.
IT companies are better positioned to absorb increased costs. According to the agency, although they are not directly subject to prices, commercial service providers are exposed to changes in the American immigration policy, which could reduce the talent basin for companies operating in the United States which count on foreign workers.
Moody’s also says that Reliance Industries, which exports about half of its production from its petroleum segment to chemistry, would probably be indirectly exposed to commercial restrictions between countries. However, the company’s strong assessment is considered to be a drop in the potential of demand or profits.
Negative impact on growth
Goldman Sachs, has planned Indian GDP to take a 10-60 BPS from Trump prices. “India gross exports to the United States are one of the lowest among its emerging market peers at around 2.0% of GDP. However, in the case of global prices on all the countries of the United States, the exposure of India’s domestic activity on US final demand would be about twice as high in the United States via exports to other countries, and would probably have an impact on the potential interior GDP of 0.1-0.6 percentage point. report.
The Goldman Sachs report indicates that there are three ways of which the United States can impose prices on India – on all products imported from India by weighted the difference in average tariff, by matching India prices on each product, or using non -tariff obstacles such as administrative barriers, import licenses, etc.
