S&P Global Ratings has stated that the new tariffs imposed by the United States will not adversely affect India’s economic growth or its positive sovereign rating outlook. The announcement follows US President Donald Trump’s decision on August 6 to impose an additional 25 percent tariff on all Indian imports, raising the total duty to 50 percent effective August 27. The White House cited India’s continued purchase of Russian oil as the reason for the move.
S&P had upgraded its outlook on India’s sovereign rating of ‘BBB-’ to positive in May last year, citing strong and steady economic growth. Speaking at a webinar on Asia-Pacific Sovereign Ratings, S&P Global Ratings Director YeeFarn Phua said India is not a trade-driven economy and will not be significantly impacted by the new tariffs. He noted that India’s exports to the US account for only about 2 percent of its GDP and that major export sectors such as pharmaceuticals and consumer electronics are exempt from the new duties.
YeeFarn stated that over the longer term, the tariffs are unlikely to pose a major threat to India’s economy, and the positive outlook on the country remains unchanged. S&P expects India’s GDP to grow by 6.5 percent in the current financial year, consistent with last year’s performance.
He also highlighted that many global companies are establishing operations in India under the ‘China plus one’ strategy, primarily to serve the large domestic market rather than relying on exports to the US. India’s expanding middle class continues to be a major draw for investors.
The US remains India’s largest trading partner. In 2024–25, bilateral trade between the two countries reached USD 186 billion. India exported goods worth USD 86.5 billion to the US, while imports stood at USD 45.3 billion, resulting in a trade surplus of USD 41 billion for India.
