Despite looming 50 per cent US tariffs linked to India&rsquo;s Russian oil purchases, analysts maintain the country&rsquo;s growth trajectory will remain intact, backed by strong domestic demand and resilient sectors.
Labour-heavy industries such as textiles and gems &amp; jewellery may face moderate pressure, but pharmaceuticals, smartphones, and steel are better positioned due to exemptions, pre-existing tariffs, and robust local consumption.
S&amp;P Global Ratings noted, &ldquo;The macroeconomic impact of tariff hikes will be cushioned by the large size of India&rsquo;s domestic market.&rdquo;
Sectors like capital goods, chemicals, automobiles, and food &amp; beverages are expected to face the toughest adjustments, though India&rsquo;s reliance on exports is relatively low compared to regional peers.
The US remains India&rsquo;s top export market for textiles, accounting for 9 per cent share. Over the last five years, India has gained ground in the US, growing its share from 6 to 9 per cent, while China&rsquo;s dropped from 38 to 25 per cent.
Market watchers highlight that domestic consumption-driven sectors including financials, telecom, aviation, hotels, cement, and capital goods will continue to support India&rsquo;s resilience. India is the best placed country in Asia amid global uncertainty, as it has the lowest goods exports-to-GDP ratio in the region.
Fitch Ratings also expects India&rsquo;s economy to maintain 6.5 per cent growth in FY26, insulated by its large domestic base and reduced dependence on global trade shocks.

US Tariffs Seen as Limited Risk to India’s Growth

Analysts say robust domestic demand will cushion economy against 50% duty impact

US Tariffs Seen as Limited Risk to India’s Growth

Analysts say robust domestic demand will cushion economy against 50% duty impact

August 25, 2025 | 15:59 IST