US tariffs pose minimal risk to India Inc’s credit quality: CRISIL

The impression of reciprocal tariffs slapped by the US on India Inc’s credit score high quality is predicted to be minimal, with lower than 0.25% of the 7,200 corporations rated by CRISIL Rankings prone to be in danger.

These corporations belong to the manufacturing section, spanning throughout sub-sectors like diamond polishers, textiles, prescribed drugs, chemical compounds, shrimp, automotive parts and electrical and industrial equipment, the ranking company stated.

“Based mostly on our evaluation, as of now, the doubtless impression is confined to lower than 0.25% of the rated portfolio and most of those corporations have at the very least 25% income share from the US. Along with balance-sheet energy, at this juncture, the credit score high quality of those corporations is unlikely to see a fabric weakening,” based on CRISIL.

Of the rated pool of round 7,200 corporations as of March 2025, two-thirds are from the manufacturing sector. Right here, the businesses uncovered to tariff threat are recognized primarily based on the income (of over 15%) from the US market. However these corporations have satisfactory balance-sheet energy, with their median gearing remaining benign at lower than 0.5 time and median curiosity protection ratio of greater than 5 instances, CRISIL stated.

Infrastructure and financial sectors, collectively accounting for 17% of the rated pool, are largely targeted on the home market, and due to this fact is not going to be impacted straight by the tariffs, the ranking company stated. The remaining 18% belongs to the companies sector, the place there are not any tariffs introduced by the US to date.

The impression evaluation on the portfolio of rated entities is carried out assuming the reciprocal tariffs introduced earlier will probably be applied after the 90-day pause in its authentic type as a base case, it stated.The impression evaluation has not thought of any second order impression such market distortions and diversion in provides to the home market, or another key export market. It additionally doesn’t issue any materials international progress slowdown as a result of tariff imposition as its method and extent are but to completely play out, CRISIL stated.