FX.co ★ Trump’s Tariffs May Trim India’s GDP by 0.5%, Yet Forecasts Stay Unchanged

In a recent Bloomberg TV interview, India's Chief Economic Adviser, V. Anantha Nageswaran, discussed the potential implications of the 50% tariffs imposed by President Trump on Indian imports. He noted that these tariffs could potentially decrease India's GDP by up to 0.5% this year. "The duration of these tariffs might result in a GDP impact ranging from 0.5% to 0.6% within the current financial year," Nageswaran remarked. Despite this challenge, he remains confident in the government's GDP growth forecast of 6.3% to 6.8% for the fiscal year concluding in March 2026. This optimism is supported by a notable 7.8% growth in Q1, the most rapid expansion in over a year.

The tariffs, implemented last month, came as a response to India's oil purchases, which President Trump claims are financing Moscow's war efforts. Nonetheless, Finance Minister Nirmala Sitharaman asserted that India will persist with purchasing Russian oil due to its favorable pricing. Additionally, she expressed the possibility of GDP growth exceeding the 6.3% to 6.8% projections for the fiscal year 2025–26. This potential uptick is attributed to heightened consumer spending, spurred by recent reductions in GST tariffs, along with the strong performance observed in Q1 GDP.