US Tariffs Pose Minimal Risk To India Inc's Credit Quality: CRISIL

(MENAFN- KNN India) New Delhi, Apr 19 (KNN) The recently announced US tariffs on products from various countries, including India, are expected to have a minimal impact on the credit quality of Indian companies, according to rating agency CRISIL.

The US has imposed tariffs on products worth USD 18 billion from India, China, Russia, and other nations.

However, CRISIL notes that the total value of impacted Indian goods amounts to only USD 4.9 billion, representing just 1 per cent of India's total merchandise exports in fiscal year 2024.

The agency's analysis reveals that the affected sectors include organic chemicals, iron and steel, engineering goods, textiles, and machinery. Despite these tariffs, CRISIL expects the overall credit impact on Indian companies to remain low, with most sectors likely maintaining their business resilience.

For chemicals and iron and steel industries, which face tariffs of 25 per cent each, exports to the US constitute only about 8-10 per cent of their total exports.

Furthermore, companies in these sectors have diversified their export destinations and product portfolios, which should help mitigate any adverse effects.

The engineering goods sector, facing a 10 per cent tariff, sends approximately 18% of its exports to the US.

However, the agency believes these companies can pass on some of the increased costs to customers or leverage their domestic market presence to offset potential revenue losses.

CRISIL emphasises that the credit impact would remain manageable as most affected companies maintain healthy financial positions with low leverage levels and strong liquidity.

The agency will continue monitoring the situation, particularly focusing on whether these tariffs escalate into broader trade restrictions or if companies face challenges in diversifying markets or maintaining profitability.

(KNN Bureau)

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