Moody’s Ratings warned on 8 August that U.S. President Donald Trump’s decision to raise tariffs on Indian goods to 50% could derail New Delhi’s push to become a global manufacturing hub and shave roughly 0.3 percentage points off economic growth, lowering its fiscal-2026 GDP expansion to about 6%. Trump doubled the levy this week—adding a new 25-percentage-point surcharge on top of an earlier 25% duty—arguing that India’s continued purchases of Russian oil warranted a penalty. The resulting tariff gap with other Asia-Pacific exporters is the widest in decades. India’s foreign ministry said it would take “all necessary steps” to protect national interests. Moody’s said the higher duty threatens investment in higher-value sectors such as electronics, risks reversing recent gains in supply-chain diversification and could widen the current-account deficit if New Delhi is forced to pay more for alternative crude supplies. The agency expects a negotiated settlement but cautioned that protracted tariffs would have a much larger drag on growth. Investors are already showing unease: foreign portfolio investors have sold about $900 million of Indian equities so far in August after $2 billion of outflows in July, while the benchmark Nifty 50 and Sensex indices are down 0.7% this month following a 2.9% decline in July.