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What Does CRISIL’s Research Note Say About US Tariffs?

Written by: Aayushi ChaubeyUpdated on: Apr 9, 2025, 12:36 PM IST
As per CRISIL, US tariffs will hurt Indian companies in industries like gems and jewellery, chemicals, and auto components.
What Does CRISIL’s Research Note Say About US Tariffs?
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A CRISIL research note has indicated that US tariffs will negatively impact profitability for Indian companies. This was shared widely on social media channels. As per its information, US tariffs will especially affect micro, small, and medium enterprises in India.

Role of MSMEs in India’s Economic Growth

Micro, small, and medium-sized enterprises (MSMEs) are crucial to the Indian economy. They make a significant contribution to employment, exports, and overall economic growth. They account for over 30% of India’s GDP. They contribute over 40% of India’s exports and providing employment to millions.

What Does CRISIL say?

CRISIL’s analysis indicates a negative outlook for the gems and jewellery sector, and a slightly negative outlook for chemicals, aluminium, and auto components.

The note indicates a neutral outlook for pharmaceuticals, solar PV modules, and steel producers.

However, it is slightly more positive for manufacturers of agricultural products, textiles, apparel, and smartphones.

These sectors collectively account for over 60% of India’s non-petroleum merchandise exports to the US.

Here is a breakdown of the sectoral impact of US tariffs on Indian industries:

Industry India’s Exports as a % of Domestic Output Exports to the US Old tariff structure Additional duties New Tariffs Potential Impact
Textiles and apparel 28.00% 37.00% 11.00% 26 37.00% Marginally favourable
Steel 5.00% 1.00% 0.00% 25 25.00% Neutral
Smartphones 30.00% 37.00% 0.00% 26 26.00% Marginally favourable
Photovoltaics 26.00% 97.00% 0.00% 0.00% Neutral
Pharmaceuticals 32.00% 53.00% 1.30% Exempt 1.30% Neutral
Gems and jewellery 26.00% 37.00% 7.00% 26 33.00% Unfavourable
Chemicals 40.00% 13.00% 3.70% 26 29.70% Marginally unfavourable
Auto components 15.00% 28.00% 2.00% 25 25.00% Marginally unfavourable
Aluminium 47.00% 6.00% 2.60% 25 25.00% Marginally unfavourable
Agriculture NA 11.00% 0.00% 26 26.00% Marginally favourable

Conclusion

US tariffs are expected to negatively impact Indian companies, particularly MSMEs. While gems and jewellery face the most significant challenges, sectors like chemicals, aluminium, and auto components also see a negative outlook. However, textiles, apparel, and smartphones might benefit slightly.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Published on: Apr 9, 2025, 12:36 PM IST

Aayushi Chaubey

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