Moody's Highlights APAC Risks in US Trade Talks

Moody's Ratings has highlighted India's lower exposure to US trade risks compared to other APAC countries, though sectors like food, textiles, and pharmaceuticals remain vulnerable. As India negotiates tariff reductions, APAC nations face challenges due to US trade policies and dominant rate differentials.

Moody's Ratings has reported that India's exposure to US trade risks is lower than other countries in the Asia-Pacific (APAC) region, despite vulnerabilities in food, textiles, and pharmaceuticals.

Negotiations between the US and India are underway to lower tariffs on American goods, increase market access for US farm products, and expand US energy purchases. Aiming for a trade deal by the fall of 2025, these talks seek to mitigate pressures from reciprocal tariffs. US President Donald Trump had introduced new tariffs, impacting various APAC sectors.

As APAC economies face challenges from US trade policies and higher rate differentials, regional governments may increase cooperation to tackle disruptions. Most APAC economies have monetary frameworks to cushion external shocks, while strong domestic demand aids in regional stability.