**London**: A new Moody’s report reveals the substantial risks posed by US tariff policies to South and Southeast Asian companies, particularly in the automotive, steel, chemicals, and business services sectors, while noting India’s pivotal role in the IT industry amidst these challenges.
A recent report by Moody’s Ratings has highlighted the potential impact of US tariff policies on companies in South and Southeast Asia, indicating significant risks for specific sectors. The report, released on Monday, identifies automotive, steel, chemicals, and business services as the sectors most vulnerable to the evolving US policies. The imposition of higher tariffs could lead to decreased demand and increased costs for these industries.
India, in particular, has been noted for its prominent position as a major labour source within the IT industry, having seen approximately 75% of the H1B visas issued in 2023 allocated to Indian nationals. This statistic underscores the country’s significant role in providing skilled workers to the US labour market. While the report acknowledges that business service providers might face challenges stemming from changes in US immigration policy, it also highlights that companies like Tata Consultancy Services (TCS) and Infosys, which have been described as having “industry-leading profitability,” are comparatively better positioned to navigate these risks.
In contrast, the report states that companies operating in the mining, oil, and gas sectors are mostly insulated from the direct effects of US tariffs. For the automotive industry, however, the analysis reveals that the exposure appears limited; vehicle exports to the US account for only around 3% of total exports for India and about 1% for Southeast Asia.
Additionally, the report notes that the US maintains a trade deficit with most countries in South and Southeast Asia, including India, highlighting the complex dynamics of the trade relationship. These insights from Moody’s Ratings provide a clearer understanding of the potential ramifications of US trade policies on regional economies and industries.
Source: Noah Wire Services
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