US President Donald Trump has decided to impose heavy tariffs of up to 50% on Indian imports, with the first 25% coming into effect from August 7 and the remaining 25% from August 28. This decision has disappointed Indian exporters, but S&P Global Ratings’ Asia-Pacific Director, Yifan Fuah, has said it will not cause any major shock to India’s economy.

According to Fuah, India’s economy is not heavily dependent on trade, and exports to the US account for only 2% of GDP. Therefore, these tariffs are unlikely to significantly impact India’s growth rate.

In May last year, S&P gave India’s sovereign rating of ‘BBB’ a positive outlook, driven by strong economic growth. The latest forecast suggests India’s GDP growth for 2025–26 will remain at 6.5%.

Fuah added that key export sectors such as pharmaceuticals and consumer electronics have been exempted from the tariffs. In his view, these tariffs will not be a major long-term obstacle for India, and the positive outlook will remain intact.

When asked about investments, he stated that under the ‘China Plus One’ strategy, companies have been expanding their operations in India not only to target the US market but also to serve the country’s large domestic demand. The rapidly growing middle class makes India even more attractive for investment.