India's GDP will go below 6.2% in FY26, if 25% US tariff continues post September: S&P Report
The report further says, if 25 per cent tariff imposed by U.S. will remain in place beyond September 2025, India's GDP will be adjusted downwards. S&P Market Intelligence has projected India's GDP for FY 2025-26 at 6.2 per cent in July, down from a GDP growth of 6.5 per cent in FY 2024-25.
"This projection is likely to be adjusted downward if the 25 per cent tariff is implemented. Its application would leave India relatively disadvantaged versus regional competitors that have secured a lower tariff rate."
The report noted that India is never going to offer market access for the U.S. in the agriculture and dairy products sectors as it will directly impact the farmers who represent a crucial electoral group in the country.
"The Indian government would be highly reluctant to offer market access for the US in the agriculture and dairy products sectors, making it difficult for India to reduce its tariffs on US exports of soy, corn, wheat and rice as farmers represent a crucial electoral group in the country." noted S&P.
Other contentious areas include exposure to section 232 which includes 'national security'. Tariffs on exports of electronics and pharmaceuticals to U.S, which accounted for 12.3 per cent and 17.8 per cent of India's export to U.S. (as per export data of 2024). U.S. has given exemption or reduced rates on both of these sectors for EU deal, it will put Indian manufacturers at a competitive disadvantage unless a similar deal is negotiated with U.S.
The report further adds that import of Russian oil and defence equipment with Russia may be another issue delaying the trade agreement.
"While India would be willing to increase imports of US crude oil, the government would be unwilling to pursue this policy change specifically due to US demands. India would be instead keener to import LNG from the US, given its growing domestic demand and expanded US supply capacity, to balance India-US trade (with a US$45.7 billion surplus recorded for India in 2024)." stated S&P.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Observer
9 hours ago
- Observer
World economies reel from Trump's punch
WASHINGTON: Global markets reeled on Friday from President Donald Trump's tariffs barrage against nearly all US trading partners as governments looked down the barrel of a seven day deadline before the higher duties take effect. Trump announced late on Thursday that dozens of economies, including the European Union, will face new tariff rates of between 10 and 41 per cent. However, implementation will be on August 7 rather than on Friday as previously announced, the White House said. This gives governments a window to rush to strike bilateral deals with Washington setting more favourable conditions. As Trump presses ahead with plans to reorder the global economy with the highest tariff rates since the early 1930s, Switzerland, "stunned" by 39 per cent tariffs, sought more talks, as did India, hit with a 25% rate. New tariffs also include a 35 per cent duty on many goods from Canada, 50 per cent for Brazil, 20 per cent for Taiwan. Taiwan said its rate was "temporary" and it expected to reach a lower figure. The tariffs are a demonstration of raw economic power that Trump sees putting US exporters in a stronger position while encouraging domestic manufacturing by keeping out foreign imports. But the muscular approach has raised fears of inflation and other economic fallout in the world's biggest economy. Stock markets in Hong Kong, London and New York slumped as they digested the turmoil. Trump's actions come as debate rages over how best to steer the US economy, with the Federal Reserve this week deciding to maintain interest rates unchanged, despite massive political pressure from the White House to cut. Data on Friday showed US job growth missing expectations for July, while unemployment ticked up to 4.2 per cent from 4.1 per cent. On Wall Street, the S&P 500 dropped 1.7 per cent, while the Nasdaq slumped 2.3 per cent. Trump raised duties on around 70 economies, from a current 10 per cent level imposed in April when he unleashed "reciprocal" tariffs citing unfair trade practices. The new, steeper levels listed in an executive order vary by trading partner. Any goods "transshipped" through other jurisdictions to avoid US duties would be hit with an additional 40 per cent tariff, the order said. Carney said his government was "disappointed" with the latest rates hike but noted that with exclusions the US average tariff on Canadian goods remains one of the lowest among US trading partners. Notably excluded from Friday's drama was China, which is in the midst of negotiations with the United States.
Times of Oman
12 hours ago
- Times of Oman
Opportunity for Omani, Bahraini SMEs to display their products
Salalah: The Omani-Bahraini Friendship Association is organising events and exhibitions in the Sultanate of Oman and the Kingdom of Bahrain to strengthen relations between the two countries in the trade and investment fields. It will provide an opportunity for entrepreneurs in small and medium enterprises to display their products and improve their production. The association will be organising the fifth edition of the Omani-Bahraini Products Exhibition in Salalah, Dhofar Governorate, on August 10. The 10-day event is being held under the patronage of Faisal bin Abdullah Al-Rawas, Chairman of the Board of Directors of the Oman Radina bint Amer Al Hajri , Chairperson of the Omani-Bahraini Friendship Association, explained that the exhibition is being organised by the association in cooperation with the Embassy of the Kingdom of Bahrain in the Sultanate of Oman and the Dhofar branch of the Oman Chamber of Commerce and Industry as part of the Dhofar Autumn Season, an exceptional season for local, Gulf, and Arab tourism. In a statement to the Oman News Agency, she said that the organisation of the exhibition stems from the close fraternal and historical relations between the two countries and their brotherly peoples, which reflect the keenness of the wise leadership in both countries and their directives to develop and enhance relations in all fields to reach the highest levels of coordination and cooperation, up to the stage of integration between them. She noted that the exhibition is witnessing the participation of approximately 33 Omani and Bahraini entrepreneurs representing a range of products, including perfumes and incense, as well as many other diverse products, such as Bahraini sweets, Omani frankincense, dates, Bahraini and Omani dresses and abayas, Omani handicrafts, Omani honey, and other products for which both countries are famous.
Times of Oman
12 hours ago
- Times of Oman
Dairy sector helps in achieving Oman's food security
Muscat: The dairy sector in the Sultanate of Oman is one of the promising sectors that contributes to achieving food security and enhancing local added value. The sector is currently witnessing significant development in light of the growing demand for high-quality local products, supported by growing investments in production lines and expansion into retail markets, amid a growing commitment to global standards of quality and sustainability. Modern Dairy Factory, a subsidiary of Oman Flour Mills Group, is a prominent player in this sector. The company achieved revenues of OMR1.45 million during the first half of 2025, a 142 percent increase compared to the same period last year, reflecting strong performance and growing market share for national products. The company announced the commencement of operations at its new factory in the Rusayl Industrial Area, as part of an expansion plan aimed at doubling production capacity, developing production lines, and launching a wide range of new products to meet local market needs and enhance export opportunities. Haitham bin Mohammed Al Fannah, CEO of Oman Flour Mills Company, emphasised that the new plant represents a qualitative leap in manufacturing technologies. It relies on advanced pasteurisation, homogenisation, and fermentation processes, along with modern automation systems for packaging, which contribute to increasing operational efficiency and ensuring the safety and quality of final products. In a statement to the Oman News Agency, he indicated that the company is committed to implementing internationally accredited quality systems and adopting hygiene and quality control procedures at all stages of production, from the receipt of raw materials to distribution, while relying on approved local suppliers. He explained that sustainability is a key focus of the company's strategy, through reducing energy and water consumption, implementing effective waste management solutions, and working to introduce renewable energy technologies in cooperation with the Oman Flour Mills Group, in a move aimed at enhancing the environmental efficiency of production facilities. He said that, as part of its drive towards innovation, Modern Dairy Factory is developing new products that suit healthy lifestyles. The company is also strengthening its research and development efforts to enrich its product portfolio and enhance the added value of the local industry. Regarding social responsibility, Haitham Al Fannah added that Modern Dairy Company continues to support the local community by sourcing from Omani institutions, providing national job opportunities, participating in health awareness campaigns, and developing partnerships with educational institutions to support nutritional education and spread the culture of healthy eating among segments of society.
