Fitch Ratings said India-based corporates have low direct exposure to US tariffs, but risks remain for sectors like pharmaceuticals if further tariffs are announced.
The US imposed a 25% “reciprocal” tariff on Indian exports effective August 7, 2025, with an additional 25% levy from August 27 as a penalty for Russian oil imports.
At 50%, India faces the highest US tariff rate among Asian economies.
Fitch Ratings on Tuesday said India-based corporates have low direct exposure to US tariffs, but sectors that are currently unaffected, including pharmaceuticals, could be hit by further US tariff announcements.
The US has imposed a 25% 'reciprocal' tariff on India with effect from August 7, 2025, and an additional 25% levy will be effective August 27, as a penalty for Russian oil imports.
At 50%, India is subject to maximum tariff among Asian economies on exports to the US.
Fitch Ratings said the risk of second-order effects from existing tariffs is also rising. A US-India trade deal, if secured, would reduce these risks.
"Fitch Ratings believes India-based corporates generally have low direct exposure to US tariffs, but sectors that are currently unaffected, including pharmaceuticals, could be hit by further US tariff announcements," it said in a statement.
Russian crude accounts for about 30-40% of crude imports for Indian oil marketing companies (OMCs), with its discounted price supporting their profitability, the rating agency said.
It currently assumes a minimal direct tariff impact on Indian IT service companies and domestically focused sectors such as upstream and downstream oil and gas, cement and building materials, engineering and construction, telecoms, and utilities.
"However, if US tariffs are sustained at levels significantly higher than in other Asian markets, we see moderate downside risks to our projection that the economy will grow by 6.5% in FY26. This would weigh on the operating performance of more Indian companies," Fitch said.
