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Tariff uncertainty may delay investments, spending: SBI Chairman Setty
The overall exposure of the banking system to four or five sectors directly exposed to the USA is very limited, and SBI also does not have much exposure to these sectors.
Setty, speaking in a post-results media interaction, said, 'The second factor that we have to take into account is the uncertainty in terms of how these tariffs are going to play out and how quickly this is going to be addressed.' It is due to this uncertainty, he said, that many investment decisions may be delayed and people may postpone spending. This was the second-order impact of tariffs, so to say, he added.
'Our assessment is that while the direct impact on these sectors may be limited, the sooner this issue gets resolved, the better. I am sure the government is working on that,' he opined.
Indian exports are broad-based — both in terms of the basket of exports and the geographies to which they are directed. 'The impact will be limited. The narrative is more damaging. I think that needs to be addressed,' he added.
Referring to subdued corporate credit offtake, Setty said, 'Corporations are not really talking about tariffs, but I think for the last two–three years we have seen global uncertainties — wars across geographies and geopolitical tensions.'
'These are all adding up, but I believe once they have greater visibility on the domestic consumption side, they would come back to the investment cycle. The bank has a very large pipeline. It is only that in some of the core sectors the decisions are delayed,' the SBI Chairman said.
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