Moody's Warns US 50% Tariffs on Indian Goods Could Cut GDP Growth From 6.3%, Challenge Russian Oil Imports, Hit Manufacturing and Electronics

Moody's Ratings has warned that India's efforts to curtail Russian oil imports to avoid a 50% tariff imposed by the United States could create challenges in securing sufficient alternative crude oil supplies promptly. The agency highlighted that continuing to import Russian oil despite the tariff could reduce India's GDP growth by 0.3 percentage points from the projected 6.3% for the fiscal year 2025-26. Additionally, Moody's cautioned that the substantial tariff gap between India and other Asia-Pacific countries might reverse India's recent progress in attracting foreign investment. The increased tariffs, part of a broader US policy under former President Donald Trump targeting nearly 70 nations, also threaten India's manufacturing sector and non-smartphone electronics exports, with potential losses estimated between $20 billion and $30 billion in the electronics industry alone. Hindustan Petroleum Corporation Limited (HPCL) reported processing 13.2% Russian crude in the June quarter, attributing the reduction to economic factors rather than government directives, and stated it is exploring alternatives should Russian supply be disrupted. Moody's analysis underscores the risk to India's manufacturing goals and overall economic growth due to the US tariff measures.