Moody's cautions U.S. tariffs could hamper India's manufacturing and crude oil supply

NOOR MOHMMED

08/Aug/2025

Moody's analysis of potential negative impacts of U.S. tariffs on India’s manufacturing sector growth trajectory.
Challenges India may face in reducing Russian oil imports to avoid U.S. penalty tariffs, affecting crude supply adequacy.
Implications for India's broader economic growth and energy security amidst changing global trade policies.

Moody's Investors Service has issued a warning that the imposition of U.S. tariffs on Indian imports could negatively impact India's efforts to boost its manufacturing sector, which is a key pillar of the country's economic growth ambitions.

The agency highlighted concerns that higher tariffs could increase costs for Indian exporters, dampening competitiveness in the U.S. market and potentially slowing manufacturing expansion. This slowdown could cascade into broader economic growth challenges for India.

Additionally, Moody's noted that India's attempts to reduce Russian oil imports to avoid penalty tariffs might complicate the country's ability to secure alternative crude oil supplies in sufficient volumes. The disruption in oil sourcing could raise costs and pose energy security risks.

This warning comes amid global geopolitical shifts and tightening trade policies, underscoring the delicate balance India must maintain between compliance with international rules and sustaining its growth momentum.

Policy makers may need to carefully navigate these challenges to support India's manufacturing sector and energy needs while managing trade relations with the U.S.

The outlook suggests that mitigating the impact of tariffs and securing stable energy supplies will be crucial for India's medium-term economic trajectory.

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Moody's cautions U.S. tariffs could hamper India's manufacturing and crude oil supply

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