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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Moody to review India Sovereign Rating: Global rating agency Moody’s is going to hold a meeting with government officials to review India’s Sovereign rating on Thursday today. This is the first such exercise from Moody’s after the tension with Pakistan and tariff trade tension after the incident in Pahalgam. According to the news of Business Standard, Senior Vice Christian D Gajman of Moody’s rating says that he is reviewing and for this he has six months time. He said that at this time the ratings also include risk like India’s conflict with Pakistan.

BAA Plus intact

Currently, India’s sovereign rating BAA Plus has been kept by Moody’s, which is the lowest level rating in the grade of investment. Gajman says that when the government is interacted with, then there is talk on every subject. This includes increasing struggle with Pakistan and the events that took place.

Moody’s Investors Service and its local unit Ecra Ratings said on Wednesday that Indian companies are in good condition to deal with the effects of customs and geopolitical pressure. However, he said that due to external challenges, the Indian industry will make the decisions to invest in the new financial year very carefully.

Domestic companies will reduce dependence on export

Moody’s statement said that non-financial companies of India are not directly affected by the US import duty due to their dependence on domestic consumption and their dependence on exports. He said that the government initiative to promote private consumption, expand manufacturing capacity and increase spending on infrastructure will help to remove the weak attitude of global demand.

Indian companies will continue to invest in the creation of capacity to meet the continuous increase in domestic consumption. Moody’s estimates that non-financial companies received by him will spend around $ 50 billion annually in capital expenditure in the next two years.

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An important report of the famous American rating agency Moody’s has come out amid increasing tension between India and Pakistan. It states that if Indo-Pak tension increases further, it can have a serious effect on Pakistan’s economy and foreign exchange reserves (Forex Reserve). At the same time, it is not expected to have any major impact on India’s economy.

Pressure on Pakistan’s Forex Reserve

According to Moody’s, if the tension between India and Pakistan lasts, it may reduce Pakistan’s growth rate and will affect its financial stability. Especially the pressure on Pakistan’s Forex Reserve will increase, which are considered insufficient to repay foreign debt in the first years.

India will not have a big impact

Talking about India, Moody’s says that the economic relations between India and Pakistan are very limited. Less than 0.5 percent of India’s total exports go to Pakistan. Therefore, despite increasing tension, there is no possibility of any major setback in India’s economic activities. According to FY25 (April to January) data, India exported $ 447.65 million to Pakistan. At the same time, imports from Pakistan were only $ 0.42 million.

Pahalgam deteriorated after terrorist attack

On 22 April 2025, 26 tourists were killed in a terrorist attack in Pahalgam, Jammu and Kashmir, which was taken responsibility by the group TRF associated with Lashkar-e-Taiba. India has identified five terrorists involved in this attack, out of which three are said to be Pakistani citizens. Only then did the tension between the two countries intensified.

IMF funds may also be affected

Moody’s report also states that if the situation worsens, Pakistan may also have an impact on the help received from IMF or other international institutions. An IMF team is scheduled to meet Pakistan on 9 May, where a new funding of $ 1.3 billion and the current bailout package of $ 7 billion is to be reviewed. It is expected from India that it can demand reconsideration of funding being given to Pakistan from IMF and other global agencies.

What is the effect on India’s economy?

The report states that if the situation worsens, India may have to increase defense spending, which may increase fiscal deficit and slow the pace of fiscal improvement. But overall, the Indian economy will remain strong.

What does Moody’s rating say?

Pakistan’s rating-CAA2 is, it is considered very weak. That is, the risk of default is high. Whereas, India’s rating is- Baa3. This investment is considered to be the lowest range of grade, but stable. That is, there is no major threat to India’s economy in the increasing tension between Indo-Pak, but this phase can be very difficult for Pakistan.

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Moody’s Rating has issued a big alert amid growing tension between India and Pakistan. According to the report, if this tension continues for a long time, Pakistan will suffer the most. Its economy may suffer a deep shock, which can also derail the government’s financial improvement process. This can pose a big threat to Pakistan’s economic stability.

Crisis hovering over foreign debt and forex reserve

Moody’s has warned that the current stress can affect Pakistan’s ability to achieve external funding. Also, the forex reserves it has may be insufficient to repay external debt in the coming years. In such a situation, Pakistan can also find it difficult to get help from institutions like IMF.

Improvement visible in Pakistan, but the danger is not yet averted

However, Moody’s also says that there have been some improvements in Pakistan in recent times. There is definitely some relief from following the decline in inflation, gradually increasing GDP, and IMF conditions. But these improvements are not sustainable until regional peace remains and tension does not increase further.

India’s economic condition strong and stable

Talking about India, Moody’s report says that India’s economy is moving firmly. India’s GDP growth remains stable, government investment is increasing and strong consumption is being seen in the domestic market. The biggest thing is that India’s trade with Pakistan is negligible (less than 0.5%), so the economic impact will be limited.

Defense spending may increase, but limited impact on India

Moody’s has definitely warned that if tension on the border increases, India may have to increase military expenses. This may have a little impact on India’s fiscal stability, but overall India’s economic condition will remain strong.

India’s tough answers

After the Pahgam attack, the Government of India has taken a tough stand on the economic and diplomatic level. All kinds of imports have been banned from Pakistan, whether it is coming through a third country. The postal service and parcel service have been suspended and Pakistani ships have been stopped from entering Indian ports. Along with this, Indian ships are also not being allowed to visit Pakistani ports.

End of Indus Water Treaty and Shimla Agreement

India has suspended the Indus Water Treaty of 1960, which can have a major impact on Pakistan’s water rights. In response, Pakistan has also suspended the 1972 Shimla agreement and has stopped bilateral trade from India. Apart from this, Indian airlines have also been banned from passing through their aircraft.

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Moody Rating for India GDP 2025: The forecast of international rating agency Moody’s on Wednesday has increased the concerns of countries around the world including India. The agency reduced the growth rate of the Indian economy from 6.5 percent to 5.5 percent in the year 2025. The growth rate of 6.6 percent was estimated in February. In his estimate, Moody said that business and investment will be affected due to the global recession hovering due to American tariff.

Moody further said in his report that due to the tension in tariffs and trade, global trade will be affected, regional exports will decrease and this will hurt the business. Also, investment in the Asia Pacific region will decrease.

The rating agency said that the US fee will weaken the debt situation and especially for low -rating companies, the risk of lapse will increase. This will spoil the global debt situation with unpredictable American trade policy and the speed of growth will be sluggish due to comprehensive economic impact. Also, the possibility of recession will increase.

Growth speed will stop

Moody Ratings said in a report, “The highest risk from the fee is to non-financial corporate sectors. Low-rated companies will be affected by their dependence on debt markets. Most of the risk for banks and sovereign countries are indirects through economic weakness.”

Moody has come from Moody after applying brakes for 90 days in tariff rates on countries around the world and 145 percent on China. Now on 16 April it has been increased to 245 percent.

Global concern will increase

Moody Ratings said, “Fee has shocked the financial markets and has increased the risk of global economic recession. Continuous uncertainty will hinder trade planning, stop investment and will affect consumer perception.”

The agency said that although this ‘break’ will give more time to businesses to accommodate production and source, but after 90 days the lack of clarity on the fee system will obstruct business planning, stop investment and slow the increase.

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Us-china trade war: There is a stir in the whole world once again with the new trade policy of America. The latest tariff decisions of Trump administration have raised concern for Asian countries as well as India. Moody’s Rating says that if it continues like this, then Asia’s economy can have a serious impact. Even India will not be completely untouched by this.

Direct attack on China

US President Donald Trump has currently given 90 days of tariffs on some countries, but a huge tariff of 125 percent on China has already been implemented. Apart from this, an additional fee of 10 percent will also continue. Nikki Dang, Senior Vice President of Moody’s, told PTI, “If the tension between the US and China increased further, it will affect the growth rate of the entire Asian region.”

India is not completely safe

Large domestic consumption economies like India are in some relief, because foreign companies can now turn to invest in local markets. But Moody’s believes that it may take many years to see a big change in such investments. Moody’s Analytics gave India’s GDP growth rate of 2025 6.4. Reduced from 6.1. Is done. The reason behind this is being given, it is the instability in global trade and the effects of America’s tariff.

America-China conflict

The heavy duty on China will increase the pressure on the economy there. India and the rest of the Asian countries can turn this opportunity into an opportunity for themselves. But Moody’s clearly says that the growing steps towards the growing uncertainty in America’s trade policy and ‘De-Globalization’ will not give global trade as the stability as before.

The world growing towards de-globalization?

Moody’s report says that even though the tariff is currently banned, America’s stance is towards ‘Rashoring’ (ie bring manufacturing to the country). Due to this, the traditional structure of global trade, which was still on trust and rules, seems to be breaking slowly.

Indo-American Trade Agreement

Meanwhile, trade experts in India believe that this 90 -day deferment is a “Golden Window”, where the bilateral trade agreement (BTA) between India and the US can be carried forward. Currently, the trade between India and America is worth $ 191 billion. Both countries have targeted to take it up to $ 500 billion by 2030. It is expected that the first phase of BTA can be completed by September-October this year.

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Moody’s Cuts India GDP Growth: This news is going to shock for India on the economic front amid global tension on tariffs. International Research firm Moody’s has now reduced its predecessor estimate of India’s GDP growth rate to 6.1 percent. However, Moody’s has estimated before the 90 -day break on the tariff from the US.

The report states that America is a very big partner of India. In such a situation, 26 percent tariff on goods exported by India will completely deteriorate the business balance. Moody’s warned that the most impact will be on games and jewelery, medical equipment and textile industry.

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