India and Japan are considered to be less vulnerable to potential tariff risks posed by U.S. President-elect Donald Trump's planned trade policies, according to Morgan Stanley.
Despite a slowdown in India's growth during the third quarter, the brokerage predicts a rebound, with GDP growth projected to reach 6.7 percent in the December 2024 quarter.
Trump's administration is expected to impose significant tariffs on countries including China, Mexico, and Canada starting January 20, 2025, which has raised concerns among investors about India's economic outlook.
However, Morgan Stanley's Chief Asia Economist, Chetan Ahya, believes that even with a potential 10 percent increase in tariffs on Indian imports, the impact on growth would be limited to a decrease of approximately 30 basis points.
The firm highlights that India's structural advantages and favorable policy environment will help mitigate the effects of any tariff hikes.