India is experiencing the steepest corporate earnings downgrades in Asia, as concerns grow over potential new US tariffs and a weakening global demand outlook.
Analysts across several global investment banks have slashed profit forecasts for Indian companies, citing rising input costs, sluggish exports, and increased geopolitical uncertainty.
According to recent data from Bloomberg and Morgan Stanley, earnings estimates for Indian companies in the benchmark Nifty 50 index have been cut by an average of 4.3 percent over the last three months, the biggest downward revision among major Asian economies.
Sectors hit hardest include information technology, pharmaceuticals, and textiles industries heavily reliant on exports to the United States.
The downgrade comes as the US administration considers a new round of tariffs on select imports, including certain goods from India, as part of a broader push to reduce trade deficits and protect domestic manufacturing.
While the exact scope of the proposed tariffs remains under discussion, early signals from Washington have already rattled investor confidence and clouded India’s export outlook.
“The prospect of fresh US tariffs is creating uncertainty at a time when Indian companies are already dealing with high raw material costs and softening global demand,” said Priya Shah, an economist at Mumbai-based B&N Research. “These factors are feeding into lower profit expectations.”
India’s IT sector, one of the largest foreign exchange earners, has seen some of the sharpest cuts in earnings projections as US clients delay spending on technology upgrades amid economic headwinds.
Similarly, the textile industry, a major employer and exporter, faces growing risks if tariffs are imposed on garments and fabric shipments.
Despite strong domestic demand and government-backed infrastructure spending, analysts warn that external risks could weigh on corporate earnings in the coming quarters.
Market sentiment has already begun to shift. The Nifty 50 has shown increased volatility in recent sessions, and foreign institutional investors have turned net sellers in Indian equities for the first time in four months.
As trade tensions escalate and global conditions remain uncertain, India’s corporate sector may face a challenging earnings season ahead, with analysts calling for a cautious approach in equity markets.
Written By Ian Maleve
