US Tariff Woes Likely to Delay Corporate Capex

Punitive tariffs are expected to hit investment sentiments even as corporate balance sheets remain healthy

- SANAL SUDEVAN @ Chennai

LEADING economists have warned that the uncertainties arising from the 50% tariff imposed by the US on Indian goods worth $45 billion reaching the American shores will force India Inc to delay their capital expenditure plans yet again.

CS Setty, chairman of the country's largest lender SBI, on Monday said India Inc is sitting over a whopping 13.5 lakh crore cash pile, essentially because of not investing in new plants or capacity addition and because of the deleveraged balance-sheets.

In a report on Wednesday, Crisil Ratings said the imposition of punitive tariffs is likely to hit investment sentiments even as healthy corporate balance sheets support fresh investments and that for the past several years it has been the government capex that has been driving investments, with private corporate capital expenditure remaining muted.

Considering a trade war as the most effective tool of diplomacy, the Trump administration has been on an import tariff hiking spree from August 7—after many delays and postponements.