Fitch warns of rising risks to Indian firms from higher US tariffs

Crop-protection chemicals major UPL Ltd also faces potential pressure, with the US contributing 10-12% of revenues. Tariffs could erode UPL’s competitive position by narrowing the gap with Chinese suppliers. However, Fitch said UPL’s diversified portfolio should help it achieve its FY26 EBITDA growth guidance of 10-14 per cent.

Oil import dependence

Indian oil marketing companies (OMCs) such as Bharat Petroleum, Indian Oil, and Hindustan Petroleum rely on Russian crude for 30-40% of imports. While discounted Russian crude has supported profitability, any restrictions on imports would dent OMC EBITDA by an estimated 10 per cent. Fitch said the ratings of state-backed OMCs would remain intact, but HPCL-Mittal Energy Ltd, with a weaker buffer, could face strain.

Limited impact on IT, domestic sectors

Fitch expects minimal direct tariff impact on Indian IT services, upstream and downstream oil and gas, cement, construction, telecom and utilities. But it warned that sustained higher tariffs in the US could trim India’s FY26 GDP growth forecast of 6.5 per cent and indirectly weigh on corporate performance.

“Increased US tariffs could also lead to diversion of supply to other markets, including India, putting pressure on domestic prices of steel, chemicals and other products,” Fitch said.