US President Donald Trump’s put 50% Tariffs on Indian imports. But it will not affect India’s economic growth, and its sovereign rankings outlook will stay amazing, as per S&P Global Ratings. New Delhi is facing a 50 % US tariff–comprising 25 % that kicked in on August 7 and another 25 % because of pressure coming on August 28 as a penalty for buying Russian oil.
Speaking at a webinar on Asia-Pacific sovereign ratings on Wednesday, Phua explained that India isn’t always a trade-oriented economic system and the country’s exposure to America in terms of exports to GDP (gross domestic product) is just about 2 %.
Why US 50% Tariffs Not affects India’s Growth
“I do not suppose the tariffs imposed on India may have an effect in terms of economic growth, in large part because India isn’t always a trade-oriented financial system. And in case you check India’s exposure to the USA in terms of exports to GDP, it’s pretty much 2 %,” he said, replying to a query on whether the tariff imposition poses downside risks to the quality outlook on India.
In the last year of May, S&P had upgraded the outlook on India’s sovereign rating of ‘BBB-‘ to positive, mentions strong financial growth. S&P’s state-of-the-art projections shows India’s GDP growth continue to be constant at 6.5 % in the ongoing fiscal year, matching the previous financial year’s overall performance.
India-US Trade
In 2021-25, the USA was India’s largest trading partner. The US bills for around 18 % of India’s general items exports, 6.22 % in imports, and 10.73 % in bilateral trade. With America, India had trade surplus of USD 35.32 billion in 2023-24. It was USD 41 billion in 2024-25.
In 2024-25, bilateral trade between India and the USA reached USD 186 billion, but now 50% Tariffs by Trump change their trade relations. India exported goods worth USD 86.5 billion while imports stood at USD 45.3 billion.
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