‘Limited direct impact from US tariffs’: Fitch revises India GDP forecast to 6.3% for FY26; infrastructure spending, local demand seen supporting key sectors – Times of India

Fitch Rankings has revised India’s GDP progress projection for the present monetary yr down to 6.3%, from its earlier estimate of 6.4%, whereas stating that the just lately introduced US tariffs are probably to have solely a restricted direct impact on Indian corporates.In its newest India Corporates Credit score Traits report launched Friday, the worldwide score company mentioned it expects sturdy infrastructure spending to maintain demand throughout core sectors, PTI reported.“We count on India’s GDP progress of 6.3 per cent and sturdy infrastructure spending to underpin wholesome demand for cement and constructing supplies, electrical energy, petroleum merchandise, metal, and engineering and building (E&C) corporations throughout FY26,” Fitch famous.The revised forecast comes months after the company projected 6.4% GDP progress in its International Financial Outlook report revealed in April.Regardless of the macroeconomic adjustment, Fitch anticipates credit score metrics for rated Indian corporates to enhance in FY26. Wider EBITDA margins are anticipated to offset the results of excessive capital expenditure, it added.On the impact of the 25% US tariffs just lately introduced by President Donald Trump—together with a penalty focusing on Indian commerce ties with Russia—Fitch mentioned the direct impact on rated Indian corporates would probably stay restricted, owing to low-to-moderate publicity to US exports.Nonetheless, the report cautioned about potential “second-order dangers” arising from world extra provide. Fitch additionally famous that an eventual India-US commerce settlement might alter outcomes, and corporations are probably to discover export diversification to mitigate the tariff shock.India and the US are within the midst of negotiations for a bilateral commerce deal. In accordance to stories, New Delhi has taken a agency stance in opposition to Washington’s demand for obligation concessions on agriculture and dairy merchandise—sectors the place India has historically supplied no preferential tariffs in any FTA.Fitch mentioned that sectors centered on the home market—resembling upstream and downstream oil & gasoline, cement and constructing supplies, telecom, utilities, and engineering and building—ought to see minimal tariff-associated disruptions due to sturdy local demand and regulatory insulation.In distinction, Fitch highlighted that tariff uncertainty might dampen discretionary exports in IT providers and automotive elements to the US and Europe throughout FY26. Prescription drugs may be weak to coverage adjustments from the US facet.Moreover, the report mentioned that metal and chemical compounds might face pricing strain from oversupplied world markets, whereas the metals and mining sector might expertise increased worth volatility due to rising world progress dangers.