US tariffs likely to moderate India Inc’s rating profile in H2 FY26

Iran war span key to outlook 

PTI

New Delhi

US tariff orders are likely to moderate India Inc's credit profiles in the second half of FY26, and the West Asia conflict, especially its duration, will play a crucial role in determining how it pans out in the future, rating agencies said on Wednesday.

Crisil Ratings, which rates over 7,300 entities, conducted a stress test on the likely impact of the West Asia crisis on Indian companies, which revealed that 23 of the 30 sectors with exposure to the Gulf region will be resilient to the pressure. The agency's managing director Subodh Rai said that it is very difficult to predict how long the war will last and what the final outcomes will be.

This is leading the agency to term the credit quality outlook as "stable" for now, on strong balance sheets and domestic demand. "Corporate India's agility and resilience are being tested again after the Covid pandemic and the tariff tantrums. We remain cautious as the duration and intensity of the West Asia conflict are uncertain. If it prolongs, slower global growth, gas availability challenges, higher-for-longer crude oil prices, and consequently impact on consumer sentiment will bear watching," senior director Somasekhar Vemuri said.