By Admin 
Moody on India Growth: US rating agency Moody’s says that the ongoing confusion over the trade deal with the US and the new tariffs announced by President Donald Trump will affect India’s economic growth. According to Moody’s ratings, India’s limited access to the US market will reduce the possibilities of increasing the country’s manufacturing sector, especially high value -added areas such as electronics. However, the agency also said that India’s domestic demand will remain strong towards these external pressures.
25 percent import duty announcement
President Trump has announced to impose 25 percent additional duty on products imported from India, which will be in addition to the current standard import duty. This tariff will be implemented from August 7. Apart from the tariff, Trump has also announced that India will be imposed ‘penalty’ due to trade with Russia. However, no clear information has been given about the amount or form of this possible penalty.
Negative effect of tariff
Christian D. Gujman, Senior Vice President of Moody’s Rating, said that the revised fee on Indian products is much higher than other major exporters in the Asia-Pacific region. While the import duty on other countries is between 15 to 20 percent, India is facing a much higher rate. “Due to limited access to the world’s largest economy (America), Gujman says,” India’s manufacturing sector- especially the possibility of growth of high price-added sectors, especially electronics may decrease. “
Growth may cause loss
India is trying to attract trade and investment from China, but high tariffs may affect its competitiveness. India and America are currently talking about a bilateral trade agreement.
Significantly, America is the largest trade partner in India and in the year 2024, America’s share in India’s total exports was 18 percent. Moody’s believes that India’s domestic demand will remain strong, as India’s economy is less dependent on international trade than other major economies in the Asia-Pacific region.
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