Overview

• Negotiators aim to wrap up an interim deal by July 9, with India seeking full exemption from the additional 26% reciprocal tariff and the U.S. pressing for agricultural duty cuts.
• Moody’s analysis highlights that India’s relatively lower U.S. tariff burden compared with Vietnam and Cambodia could shift manufacturing investment to India.
• Elevated U.S. levies on export-dependent APAC economies have disrupted trade and heightened cyclical and structural credit risks.
• India’s new free trade agreement with the U.K. and ongoing EU talks reinforce its push to emerge as a global manufacturing base.
• Corporations are holding off on significant investment decisions until the interim agreement brings transparency to tariff outcomes.