Latest news with #ChristiandeGuzman
Time of India
6 days ago
- Business
- Time of India
US effective tariff rate on Indian goods rises to 20.7%, up from 2.4% in 2024; escalating trade tensions cast shadow on growth outlook: Fitch report
The effective US tariff rate on Indian goods jumped to 20.7 per cent in 2025 from just 2.4 per cent in 2024, Fitch Ratings said in its latest assessment. Fitch reported, quoted by ET, noted that the overall US effective tariff rate stands at 17 per cent- about 8 percentage points lower than the estimate made on April 3 when reciprocal tariffs were initially declared. Tired of too many ads? go ad free now It explained, 'The US tariff rate of 17 per cent reflects a 15 per cent tariff rate on EU goods, including auto and auto parts, and higher tariffs for major trading partners Brazil, Taiwan, India and Switzerland.' Also read: The revised numbers come days after US President formally announced a 25 per cent tariff on Indian goods, alongside a separate, undefined "penalty" linked to India's ongoing energy trade with Russia. As the trade environment becomes increasingly uncertain, economists are trimming their growth expectations for India. Goldman Sachs has cut its growth projection for 2025 to 6.5 per cent and for 2026 to 6.4 per cent, citing the tariff surge as a key driver of the revision. 'In our view, some of these tariffs are likely to be negotiated lower over time, and further downside risk to the growth trajectory mainly emanates from the uncertainty,' the investment bank said. , in its own analysis, estimated that the new US tariffs could reduce India's by 20 to 25 basis points. Christian de Guzman, senior vice president at Moody's Ratings, said the long-term effects could weigh on India's ambitions to become a major manufacturing hub. 'Curtailed access to the largest economy globally diminishes prospects for India's ambitions to develop its manufacturing sector, particularly in higher value-added sectors such as electronics,' he said, as quoted by ET. Tired of too many ads? go ad free now Despite the rising headwinds, Moody's maintains a relatively positive outlook on India's broader economic stability. 'India's economy is expected to remain resilient as it is less trade-reliant than other large economies in the Asia-Pacific,' de Guzman added.
Economic Times
6 days ago
- Business
- Economic Times
US effective tariff on Indian goods jumped to 20.7% from 2.4% last year: Fitch Ratings
Synopsis Fitch Ratings reports a significant increase in US tariffs on Indian goods by 2025. This rise to 20.7% from 2.4% may hinder India's economic expansion. Goldman Sachs has already lowered India's growth forecasts. HDFC Bank also anticipates a GDP growth reduction. Moody's Ratings suggests potential challenges for India's manufacturing sector. However, India's economy is expected to remain resilient. Agencies New Delhi: The US effective tariff rate on Indian goods rose to 20.7% in 2025, up from 2.4% in 2024, due to the addition of an 18.3 percentage point increase this year, according to Fitch Ratings. The increase in tariffs poses some downside risk to India's economic growth. Overall, the US effective tariff rate is now 17%, around 8 percentage points lower than April 3 estimate, when higher reciprocal tariffs were originally announced, it said on Monday. "The US tariff rate of 17% reflects a 15% tariff rate on EU goods, including auto and auto parts, and higher tariffs for major trading partners Brazil, Taiwan, India and Switzerland," it added. Last week, US President Donald Trump announced 25% tariff on Indian goods, along with an unspecified additional penalty related to India's energy dealings with Russia. Goldman Sachs on Monday cut India's economic growth forecast to 6.5% for 2025 and 6.4% for 2026, due to US tariffs. "In our view, some of these tariffs are likely to be negotiated lower over time, and further downside risk to the growth trajectory mainly emanates from the uncertainty, " it to HDFC Bank, the tariff poses a downside risk of 20-25 bps to India's GDP growth. Christian de Guzman, senior vice president, Moody's Ratings, said, "Curtailed access to the largest economy globally diminishes prospects for India's ambitions to develop its manufacturing sector, particularly in higher value-added sectors such as electronics".He, however, added, "India's economy is expected to remain resilient as it is less trade-reliant than other large economies in the Asia-Pacific."
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Business Standard
04-06-2025
- Business
- Business Standard
Moody's review meet with govt to focus on global trade, Indo-Pak conflict
The recent India-Pakistan conflict and global trade tensions will be in focus during the global rating agency Moody's meeting with the officials of the Union government in New Delhi on Thursday to review India's sovereign ratings. This is the first such exercise after the recent stand-off with Pakistan. 'Our reviews are ongoing, and we do have a semi-annual cycle for reviews, and we're taking this opportunity, while we're in India, to continue to engage with the government,' said Christian de Guzman, senior vice-president, Moody's Ratings, in response to a query from Business Standard. Guzman said the current ratings on India factor in geopolitical risks like conflict with Pakistan. 'I think when we engage with the government, we engage on everything,' he said, adding the events that have happened with Pakistan, including the escalation of the conflict and the subsequent de-escalation, are consistent with Moody's view on political risk. Moody's currently maintains India's sovereign rating at 'Baa3' with a stable outlook, which is the lowest investment-grade rating. Rating agency officials had earlier met Indian officials in April in Washington, DC, at Spring Meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF). Referring to the impact of the global tariff shock on growth, Guzman said, 'We have reviewed our expectations for growth across the G20, and we have adjusted those growth forecasts in a manner that is consistent with their exposure to the tariff shock. In the case of India, that exposure, in relative terms, is small'. In early May, Moody's had lowered growth forecasts for India by 30 basis points to 6.3 per cent for 2025. Moody's in its note on India (May 21) had observed that persistent tensions, such as the recent escalation between India and Pakistan, are accounted for in its geopolitical risk assessment. 'In a scenario of sustained escalation in localised tensions, we do not expect major disruptions to India's economic activity because it has minimal economic relations with Pakistan,' the note said. Moreover, the parts of India that produce most of its agricultural and industrial output are geographically distant from the conflict zones. However, higher defence spending would potentially weigh on India's fiscal strength and slow its fiscal consolidation, it added. India was better positioned than many other emerging markets to deal with US tariffs and global trade disruptions, helped by robust internal growth drivers, a sizable domestic economy and a low dependence on goods trade, according to a Moody's note on impact of tariff on emerging markets. The significant government investments will bolster sectors from infrastructure to manufacturing, at a time when rapid urbanisation and a young population is underpinning structural demand for housing and consumer goods. Easing inflation offers the potential for interest rate cuts to further support growth, the agency had said.
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Business Standard
04-06-2025
- Business
- Business Standard
Moody's to review India's sovereign rating amid global, regional risks
Global rating agency Moody's will hold a meeting with officials in the Union government in New Delhi on Thursday to review India's sovereign rating—the first such exercise after the recent stand-off with Pakistan, subsequent ceasefire, and amid global trade tensions. 'Our reviews are ongoing, and we do have a semi-annual cycle for reviews, and we're taking this opportunity, while we're in India, to continue to engage with the government,' said Christian de Guzman, senior vice-president, Moody's Ratings, in response to a query from Business Standard. The current ratings on India factor in geopolitical risks, including conflict with Pakistan, de Guzman said. Moody's currently maintains India's sovereign rating at "Baa3" with a stable outlook, the lowest investment-grade rating. Agency officials had earlier met Indian counterparts in April in Washington, DC, during the Spring Meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF). Asked whether the review would address the implications of the recent standoff with Pakistan, de Guzman said, 'I think when we engage with the government, we engage on everything.' He added that the recent escalation and subsequent de-escalation of tensions with Pakistan were consistent with Moody's view on India's political risk environment. On the impact of global tariff shocks on growth, de Guzman said, 'We have reviewed our expectations for growth across the G20, and we have adjusted those growth forecasts in a manner that is consistent with their exposure to the tariff shock. In the case of India, that exposure, in relative terms, is small.' In early May 2025, Moody's lowered its growth forecast for India by 30 basis points to 6.3 per cent for 2025. In a note dated May 21, 2025, Moody's stated that persistent tensions—such as the recent escalation between India and Pakistan—were already accounted for in its geopolitical risk assessment. 'In a scenario of sustained escalation in localised tensions, we do not expect major disruptions to India's economic activity because it has minimal economic relations with Pakistan,' the note said. Moreover, regions that account for most of India's agricultural and industrial output are geographically distant from the conflict zones. However, the note added that higher defence spending could weigh on India's fiscal strength and slow fiscal consolidation. India is better positioned than many other emerging markets to deal with US tariffs and global trade disruptions, thanks to strong domestic growth drivers, a large internal economy, and low reliance on goods trade, according to a Moody's note on the impact of tariffs on emerging markets. Significant government investments are expected to bolster sectors ranging from infrastructure to manufacturing, at a time when rapid urbanisation and a young population are driving structural demand for housing and consumer goods. The agency also said easing inflation offers the potential for interest rate cuts to further support growth.
