New Delhi, Aug 22
The US tariff hike of 50 per cent would hit Indian corporates unevenly, with the labour-intensive textiles and gems and jewellery segment expected to see only a moderate impact while pharmaceuticals, smartphones and steel are currently relatively insulated because of exemptions, existing tariffs and strong domestic demand, according to a report on Friday.
However, capital goods, chemicals, automobiles, and food and beverage exports would face the toughest adjustment, the S&P Global report states.
The fallout from a US move to double tariffs on Indian goods -- from 25 per cent to 50 per cent from August 27 -- in retaliation for New Delhi's oil trade with Moscow will not be uniform, in S&P Global Ratings' view. This will be the highest tariff in the region and will affect 50 per cent-60 per cent of India's total exports to the US.
However, the macroeconomic impact of the hike in tariffs would be cushioned by the large size of the India’s domestic market.
A recent Morgan Stanley report had stated that India is the “best placed country in Asia,” amid the global uncertainty triggered by US President Donald Trump’s threat to jack up tariffs, because of the nation’s low goods exports to GDP ratio.