India sees no hit to projected growth from US tariffs, economists are sceptical
Delhi still projects 6.3-6.8% growth for 2025/26; economists pare it back to 6.1%. Government in talks with exporters to assess fallout
[NEW DELHI] India may still meet its 6.3 to 6.8 per cent growth projection for the 2025/26 fiscal year that started on Apr 1 despite global disruptions from the new US tariffs, if oil prices stay below US$70 a barrel, government officials said – even as many private economists lowered their forecasts.
Economists, including those at Goldman Sachs, have lowered India’s growth estimates by 20 to 40 basis points to 6.1 per cent for the current 2025/26 financial year, citing the impact of the global tariffs imposed by US President Donald Trump.
A 26 per cent tariff on Indian imports, with even higher levies on other countries like China, has escalated global trade tensions, sending major stock indices plunging in Asia on Monday (Apr 7).
India’s diamond industry, which ships more than a third of its exports to the US, is expected to be among the worst-hit sectors; thousands of jobs there are at risk.
Discussions are underway with ministries and exporters’ associations to assess the fallout, the officials said.
The finance ministry has already received four to five proposals from the commerce ministry to support export industries, including an extension of an interest-subsidy scheme, aid for diversification, and increased bank credit, a second official said.
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“We are still studying the impact of the tariff hikes on the export sectors, and the decision would be taken at the appropriate time,” the official said.
But a third finance ministry official said the tariffs would not weigh heavily on India’s key fiscal parameters for this financial year.
“We have already made provisions in the Budget for duty-remission schemes to help exporters and are open to doing more,” the official said.
The officials spoke on condition of anonymity as they were not authorised to speak to the media.
India’s finance ministry did not immediately respond to an e-mailed request for comment.
New Delhi does not plan to retaliate against Trump’s tariffs as officials try to negotiate a resolution, Reuters has reported.
Officials said the impact of the US tariffs on labour-intensive sectors such as textiles, footwear and agriculture was the government’s biggest worry.
The government could increase support to exporters under its export-promotion scheme announced in the Budget, within fiscal constraints, the second official said. REUTERS
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