In a detailed commentary on April 9, Moody\u2019s Ratings noted that Malaysia, India, and the Philippines are poised to benefit from potential trade diversion as a result of the sweeping reciprocal tariffs imposed by the United States, particularly on China and several Southeast Asian economies. These three countries have been placed in the mid-tier tariff bracket (10\u201330%), positioning them more favorably than high-tariff economies such as Vietnam, Cambodia, and Thailand, which are seeing levies of up to 49 percent.<\/p>\n
India hit with 26% US tariff\u2014lower than China’s 104%<\/p>\n<\/li>\n
Trade diversion may boost medium-term production relocation<\/p>\n<\/li>\n
China, Vietnam, Cambodia face the harshest tariff impact<\/p>\n<\/li>\n<\/ul>\n
India, with a 26 percent US tariff, sits in the middle of the newly imposed band of reciprocal tariffs introduced by the Trump administration, which have been disproportionately severe on China (104%) and Vietnam (46%). Moody\u2019s noted that India’s relatively diversified export base, coupled with its lower direct exposure to the US compared to East Asian economies, reduces its vulnerability while opening doors for potential gains.<\/p>\n
According to Moody\u2019s, India\u2019s large domestic market makes it a viable alternative hub for global manufacturers seeking to maintain access to scalable consumption while mitigating exposure to tariff-heavy jurisdictions. However, meaningful shifts in supply chains would materialize over multiple years, constrained by logistical, policy, and infrastructure factors.<\/p>\n
India\u2019s diversified exports to US offer shock absorption<\/p>\n<\/li>\n
Large domestic market attractive for production relocation<\/p>\n<\/li>\n
Structural gains contingent on long-term investment shifts<\/p>\n<\/li>\n<\/ul>\n
Moody\u2019s analysis highlighted that Vietnam, Cambodia, Thailand, and Taiwan have the highest direct export exposure to the US, increasing their downside risk from the tariff shock. By contrast, Pakistan and Bangladesh, while less exposed overall, rely heavily on the US for textiles, food, and wood product exports\u2014sectors with high price elasticity that are particularly vulnerable to shortfalls in demand.<\/p>\n
India\u2019s more balanced export composition, especially in pharmaceuticals, engineering goods, and IT services, shields it from the full force of demand-side compression in the US market. Nonetheless, analysts caution that any global slowdown triggered by the US-China trade war could weigh on India’s medium-term export performance.<\/p>\n
High exposure: Vietnam, Cambodia, Thailand<\/p>\n<\/li>\n
Narrow sectoral exposure: Pakistan, Bangladesh (textiles, food)<\/p>\n<\/li>\n
India\u2019s diversified mix offers relative insulation<\/p>\n<\/li>\n<\/ul>\n
Moody\u2019s reiterated that the escalating US-China trade conflict poses \u201csignificant downside risks\u201d to the global and regional economic outlook. The 104 percent tariff now levied by the US on Chinese goods, following China\u2019s retaliatory 34 percent tariff, is expected to severely disrupt global supply chains, amplify uncertainty, and fuel disinflationary pressures across Asia.<\/p>\n
Amid these developments, central banks are likely to adopt accommodative monetary policy, Moody\u2019s noted. India\u2019s RBI on April 9 cut its repo rate by 25 basis points, reducing it to 6 percent, marking its second consecutive rate cut, while lowering its FY26 inflation forecast to 4 percent from 4.2 percent.<\/p>\n
Moody\u2019s sees risk to global and regional economic stability<\/p>\n<\/li>\n
Tariffs to generate deflationary ripple effects<\/p>\n<\/li>\n
Central banks expected to ease policy to support demand<\/p>\n<\/li>\n<\/ul>\n
While monetary easing is expected to provide a cushion, Moody\u2019s warned that fiscal interventions by regional governments to offset the growth shock could strain sovereign credit profiles. Many governments, including India, are still navigating elevated post-pandemic debt levels, which restrict their ability to deliver aggressive fiscal stimuli without jeopardizing ongoing fiscal consolidation efforts.<\/p>\n
The report emphasized that a delicate balance must be maintained between protecting growth and safeguarding sovereign creditworthiness. Excessive fiscal loosening to mitigate tariff-driven disruptions could derail macroeconomic stability over the medium term.<\/p>\n
Fiscal support may slow progress on debt consolidation<\/p>\n<\/li>\n
Higher pandemic-era debt burdens limit stimulus capacity<\/p>\n<\/li>\n
Sovereign credit could be pressured by prolonged tariff tensions<\/p>\n<\/li>\n<\/ul>\n
Despite the near-term volatility and risk aversion across global markets, Moody\u2019s noted that the ongoing trade realignment\u2014sparked by geopolitical fracturing and tariff reorientation\u2014offers a window of opportunity for countries like India, Malaysia, and the Philippines. To capitalize, these economies must commit to long-term policy stability, infrastructure improvements, and ease of doing business, all of which are essential to attract global capital and production relocation.<\/p>\n
India, in particular, stands to gain if it can sustain recent manufacturing incentives, improve logistics competitiveness, and enhance trade facilitation measures. However, any prolonged delays in reform implementation or fresh protectionist tendencies could dull its competitiveness in the shifting global trade landscape.<\/p>\n
India well-positioned but gains hinge on long-term policy execution<\/p>\n<\/li>\n
Supply chain shifts require investment, regulatory stability<\/p>\n<\/li>\n
Structural reforms critical to turning opportunity into economic upside<\/p>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"
Moody\u2019s Sees Mixed Impact of Global Tariffs on Asia-Pacific Economies In a detailed commentary on April 9, Moody\u2019s Ratings noted that Malaysia, India, and the Philippines are poised to benefit from potential trade diversion as a result of the sweeping reciprocal tariffs imposed by the United States, particularly on China and several Southeast Asian economies. […]<\/p>\n","protected":false},"author":4,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1362,1366],"tags":[],"ppma_author":[1331],"class_list":{"0":"post-6725","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-and-economy-news","8":"category-world-news"}," _eael_post_view_count":0,"authors":[{"term_id":1331,"user_id":4,"is_guest":0,"slug":"sourabh","display_name":"Sourabh Sharma","avatar_url":{"url":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png","url2x":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/6725","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=6725"}],"version-history":[{"count":1,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/6725\/revisions"}],"predecessor-version":[{"id":6727,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/6725\/revisions\/6727"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/6726"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=6725"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=6725"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=6725"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=6725"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}