China+1 strategy could help Indian ports: Moody’s

Indian ports could benefit from a diversification away from China, Moody’s Ratings noted on May 20. In its new report, the global ratings agency highlighted that companies trying to setup manufacturing facilities outside of China could have significant upside for Indian ports as well. “In Asia, Chinese ports’ financials could weaken although most have the financial capacity to withstand near term stresses. And ports in India and Indonesia could benefit from the China+1 strategy – companies’ effort to diversify their manufacturing and supply chain operations by establishing facilities in countries outside China,” Moody’s Ratings said.

Besides tariffs, geopolitical events were an additional stress for emerging markets, Moody’s highlighted, pointing to the recent flare up of tensions between India and Pakistan. Tensions between the two countries rose after terrorists killed 26 tourists in Pahalgam, one of the worst attacks in the valley in nearly three decades. India is likely to be less impacted by tariffs than other markets Moody’s noted, as it pointed to low exposure from US actions and increased reliance on domestic economy. “India also has a relatively low overall exposure – and more diversified exports to the US. These attributes plus its large domestic economy position India well to deal with US tariffs,” it said. Moody’s Ratings nevertheless had pared down India’s growth forecast to 6.3 percent for 2025 from 6.7 percent projected earlier. The ratings agency expects the economy to do better in 2026, with growth rising to 6.5 percent.