Moody’s warns higher US tariffs; May hinder Make in India campaigns

According to a forecast by US ratings agency Moodys Indias manufacturing competitiveness will be directly impacted by the additional sanctions Trump has imposed on the nation for its continued purchases of cheap Russian oil.

New Delhi: The additional 25% tariffs that US President Donald Trump has placed on Indian goods may present a significant obstacle for India. This may prove to be a major obstacle to Indias goal of independence.

According to a forecast by US ratings agency Moodys Indias manufacturing competitiveness will be directly impacted by the additional sanctions Trump has imposed on the nation for its continued purchases of cheap Russian oil.

The US announced a 25 percent tariff on India on 31 July that went into effect on 7 August. Trump also announced an additional penalty of 25 percent on 6 August this penalty will go into effect on 28 August.

Negotiations between the two parties are still possible though. Indian challenges. Moodys warned on Friday that higher tariff rates relative to other Asian nations could hurt Indias manufacturing sector and its ambitious Make in India campaign.

The industry of high-value electronics will be especially affected. As the Atmanirbhar Bharat Abhiyan seeks to increase domestic production and lessen reliance on foreign sources it may suffer if the additional tariffs placed on India for purchasing oil from Russia come into effect.

Effects of Make in India

Since 2020 the Indian government has been offering discounts and incentives under the Make in India initiative to support a number of industries. It has had a positive impact in recent years. In the nation the pharmaceutical and mobile manufacturing industries have experienced tremendous growth whereas the textile semiconductor and solar energy sectors are expanding more slowly.

The US is a significant trading partner of India as evidenced by the $31. 8 billion in trade between the two countries in FY 2024–2025. India exported approximately USD 86. 5 billion to the US primarily in the form of textiles electronics machinery and pharmaceuticals. The majority of these products are included in the incentive programs provided by the Indian governments PLI scheme.

In what circumstances has the new tariff been put into effect?

• Temporal restriction: Items leaving before August 27 and arriving in the US by September 17 will not be subject to this duty.
• Prior exemption: Items that were previously unaffected by the tariff will remain so.
• Along with other duties: This new tariff will be applied in addition to the current taxes and duties. Action against those buying oil from Russia is Trumps warning.