Mumbai, Aug. 18 -- Indian banks have low exposure to the sectors in the direct line of US President Donald Trump's tariffs. Yet, as trade disruption ripples through the economy, they may not escape a further slowing in corporate loans.

Sectors including textiles, jewellery, apparel, seafood, machinery and mechanical appliances, chemicals, and auto components are expected to bear the brunt of the 50% tariffs on Indian goods entering the US. Direct lending by top banks such as State Bank of India, ICICI Bank and HDFC Bank to these industries is estimated to be about 10% of the overall loans, limiting the impact on lenders. What is concerning is the second-order hit.

There are three primary reasons behind concerns about a potential slowdow...