Written by The Banking Post
India’s Chief Economic Adviser V. Anantha Nageswaran has warned that US President Donald Trump’s 50% tariffs on Indian goods could shave 0.5–0.6% off the country’s GDP this fiscal year, Bloomberg News reported Monday.
Speaking to Bloomberg TV, Nageswaran said, “Depending upon how long it lasts, even in this financial year, it may translate into a GDP impact of somewhere between 0.5 percent to 0.6 percent.”
The tariffs, imposed last month, target India’s merchandise exports to the US, which totaled $87 billion in 2024. Exporter groups estimate about 55% of these exports could be affected, potentially benefiting competing suppliers such as Vietnam, Bangladesh, and China.
Trump has cited India’s Russian oil imports as a factor behind the tariffs, asserting that New Delhi’s purchases are indirectly funding Moscow’s war effort in Ukraine. Finance Minister Nirmala Sitharaman defended the policy, noting that Russian oil remains economically viable for India.
Despite the potential drag from tariffs, Nageswaran reaffirmed the government’s GDP growth forecast of 6.3–6.8% for the fiscal year ending March 2026, citing a 7.8% expansion in the April–June quarter, the fastest pace in over a year.
US-India two-way goods trade totaled $129 billion in 2024, with the US recording a $45.8 billion trade deficit, according to US Census Bureau data.
