Indian firms resilient to US tariff pressures: Moody's & ICRA
Moody's-rated Indian non-financial corporates are largely shielded from US import tariffs, owing to their domestic market orientation and minimal export reliance, as per Moody's Ratings.
Most Indian non-financial corporates are shielded from US tariffs due to domestic focus, according to Moody's and ICRA. Textiles may gain from the Indiaâ€'UK FTA, while capex is expected to reach $50 billion annually over two years. GDP growth is forecast at 6.3 per cent in FY25. Despite geopolitical risks and sector-specific challenges, corporate balance sheets remain strong and well-positioned.
The Indian textile sector is expected to gain a competitive edge over China, buoyed by the recent India–UK Free Trade Agreement.
Continued government focus on boosting private consumption, expanding manufacturing capacity, and ramping up infrastructure spending is expected to offset weakening global demand, Moody's Ratings and its Indian affiliate ICRA said in a release.
'Shifts in global supply chains coupled with the Indian government's efforts to increase local production will benefit domestic manufacturing. However, challenges such as the inadequacy of skilled labour, evolving logistics infrastructure and complex land and labour laws in the country could constrain the growth of India's manufacturing sector', said Vikash Halan, managing director at Moody's Ratings.
Moody's is expecting these companies would invest approximately $50 billion annually in capital expenditure over the next two years, largely funded through internal accruals. As a result, average leverage levels, measured by debt/EBITDA, are projected to stay close to 3.0x.
Meanwhile, ICRA has noted that Indian corporates are generally well-positioned to weather tariff uncertainties and geopolitical tensions. However, sectoral vulnerabilities persist. Geopolitical risks, especially tensions with Pakistan, may temporarily impact the travel and hospitality sectors. Yet, India's overall exposure to such risks is seen as moderate.
ICRA has forecast India's GDP to grow by 6.3 per cent in fiscal 2025 (FY25) and 6.2 per cent in fiscal 2026 (FY26). Manufacturing momentum is accelerating under the Production-Linked Incentive (PLI) scheme.
'Urban consumption, muted in FY25, is expected to recover in FY26, supported by income tax relief, further rate cuts, and easing food inflation,' said K Ravichandran, EVP and chief rating officer, ICRA Ltd.
India's corporate sector has also seen significant deleveraging, with debt/OPBITDA improving to 2.1x as of March 2025, from 3.2x in March 2019. In the financial sector, despite some asset quality concerns in unsecured lending and microfinance, both bank and NBFC balance sheets remain stable and capable of supporting credit growth, contingent on liquidity conditions.
Fibre2Fashion News Desk (HU)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
United News of India
2 hours ago
- United News of India
Afghan dry fruit traders concerned over continued closure of Attari-Wagah border
Kabul, June 21 (UNI) The closure of the Attari–Wagah border crossing, one of Afghanistan's key trade routes to India, has raised serious concerns among dried fruit exporters of Afghanistan. The Kabul Dry Fruit Exporters Union has warned that stopping freight truck movement on this route could severely disrupt both fresh and dried fruit exports, Tolo News reported. The union has urged Pakistani and Indian authorities to reopen the route permanently for Afghan cargo trucks. Khalid Rahmani, spokesperson for the union, told TOLOnews, 'We hope alternative links through Wagah and Chabahar ports will open soon. Given the current political and trade tensions between Pakistan and India, we predict a decline in exports to both countries.' After the Indian and Pakistani military tensions eased, the border reopened briefly on May 9, allowing about 162 trucks to pass, but it was shut again. At least 12 Afghan export trucks remain stuck at the crossing. With the fruit harvest season approaching, traders warn that continued closure could pose major challenges for Afghan exports. They are calling for diplomatic engagement to reopen this critical trade route. Omid Haidari, head of international relations at the Chamber of Agriculture and Livestock, said: 'We urge the leadership of the Islamic Emirate, especially the Ministry of Foreign Affairs, to strengthen contact with the Indian Foreign Ministry so that our major trade route can be reopened.' Merchant Mahboobullah Mohammadi, said, 'Our biggest export is dried fruit, especially pine nuts, which we mostly send to India via Wagah. But the decline in exports this year has brought significant losses. Our air corridors are still shut, and large amounts of pine nuts remain unsold in local markets.' The Wagah border was closed after tensions escalated between India and Pakistan following the terrorist attack in Pahalgam, India, on April 22. The closure of the land border check post continues to cast a shadow over Afghanistan's regional trade. UNI ANV RN
Time of India
2 hours ago
- Time of India
FATF flags Pakistan bid to ship in missile gear from China on sly
(AI image created using ChatGPT) NEW DELHI: A new report by Financial Action Task Force has flagged Pakistan's attempts to procure equipment for its missile programme by mislabeling shipment, drawing attention to the country's failure in implementing measures to combat financing of proliferation of weapons of mass destruction, which is one of the recommendations of the global watchdog. The report not only reveals that critical components for ballistic missiles originating from China were mislabeled in documents but also links the importer to Pakistan's National Development Complex which handles missile production. India is likely to use the revelations in its dossier to make another push for Pakistan's return to the FATF 'grey list' which identifies countries with weaknesses in their anti-money laundering and terror financing systems. These countries are subjected to closer monitoring and must demonstrate progress on corrective action plans. Pakistan has been on the list three times with the most recent sanction of 2018 lifted in 2022. In Feb 2020, a Chinese vessel named 'Da Cui Yun', which was en route to Port Qasim in Karachi, was intercepted at Gujarat's Kandla port. While the equipment was seized, the ship and its crew were allowed to leave after investigation. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 5 Books Warren Buffett Wants You to Read In 2025 Blinkist: Warren Buffett's Reading List Undo In its latest report titled 'Complex Proliferation Financing and Sanctions Evasion Schemes', FATF refers to the investigation by Indian Customs. "Indian authorities confirmed that documents mis-declared the shipment's dual-use items. Indian investigators certified the items for shipment to be 'autoclaves', which are used for sensitive high energy materials and for insulation and chemical coating of missile motors," it read. "The sensitive items are included in dual-use export control lists of the Missile Technology Control Regime, India, and other jurisdictions. The Bill of Loading of the seized cargo provided evidence of the link between the importer and National Development Complex," it added. FATF may release the report next month amid hopes in India that it would expose Pakistan's inadequacies in combating terror financing - something which could potentially result in the country being placed under enhanced monitoring, and being returned to 'grey list'. This move would subject Pakistan to increased financial scrutiny, impacting foreign investment and capital inflows. India has been pushing for Pakistan's return to the list, citing its brazen support for terrorism and failure to comply with FATF norms.
Time of India
2 hours ago
- Time of India
Kerala fisheries crisis: Seafood exporters seek govt support
Kochi: Seafood Exporters Association of India (SEAI), Kerala region, sought immediate govt assistance to address a severe crisis affecting the livelihoods of 1.4 million people in the state, following environmental difficulties and export-related challenges. SEAI Kerala president, Premachandra Bhat, said Kerala has declined from its position as the leading seafood exporter to fifth place, primarily due to environmental impacts. The state's 590km coastline and nine coastal districts have seen fishing days reduced from 300 to 100 annually. This reduction is attributed to poor weather, fishing restrictions and the current 52-day trawling ban until July 31. The situation worsens as foreign factory vessels from China and Taiwan continue illegal fishing during restricted periods, diminishing local marine resources. "We urgently need stronger coastal surveillance and regulatory enforcement. While our fishermen face strict restrictions, foreign vessels continue to plunder our seas unchecked," Bhat said. He emphasised the critical need for increased domestic production. "Shrimp is the crown jewel of our exports. But without adequate raw material, even the most advanced processing facility becomes nothing more than a silent warehouse," he warned, advocating for govt support in commercial aquaculture and sustainable shrimp farming. Bhat identified the implementation of Turtle Excluder Devices (TEDs) in trawl nets as a crucial priority, essential for marine conservation and maintaining access to environmentally conscious markets like the United States. "We have the technology. We have the necessary approvals. What we now need is administrative will—an urgent push to implement TEDs without further delay," he said. Global challenges, including transport disruptions, the Russia-Ukraine war, Middle East tensions and shipping route instability, are pressuring Indian seafood exporters to maintain competitiveness against China, Vietnam, Indonesia and Ecuador. Kerala's industry continues to advance through initiatives like the Plastic-Free Seas Project, where fishermen collect marine plastic waste for proper disposal. "This is a model for the nation. It proves that sustainable practices and profitability can go hand in hand," Bhat added. Women constitute 80% of Kerala's fish processing workforce, operating in over 850 peeling sheds and 100 processing units. Highlighting the sector's significance as a women-oriented industry in Kerala, SEAI said there is a need for year-round employment. The association requested improved access to working capital loans for raw material procurement during peak seasons and continuous processing in lean periods. "When you support this industry, you are not just protecting exports—you are empowering thousands of women and securing countless family incomes," he said, adding that the govt should utilise Kerala's NRI-supported banking system to provide targeted assistance for fish processing facilities.
