India well-positioned to negate impacts of US tariff: Moody’s

“Significant government investments will boost sectors such as construction, mining and manufacturing, while urbanization and a young population will fuel demand for housing and consumer goods. However, sectors with exports, like automotives, are exposed to global trade challenges, despite diversified operations,” it says.

It highlighted the fact that India’s sound banking market and stable credit conditions underscore its economic strength despite global volatility. However, it feels a deterioration in global economic and credit conditions can have knock-on effects.

“Easing inflation offers the potential for interest rate cuts to further support the economy, even as the banking sector’s liquidity facilitates lending,” says Moody’s.

It further says that India’s banking sector is poised to weather potential turbulence. Healthy profitability and strong capitalization drive the credit strength of Indian banks, it says, adding that domestic conditions remain favorable because of government capital spending, tax cuts and monetary easing.

On the Pakistan-India tensions, it says the recent flare-up between the two nations would weigh on Pakistan’s growth more than on India’s.