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India Projects GDP Growth Despite U.S. Tariff Impact
(MENAFN) The federal government's Economic Survey, presented to parliament Thursday, forecasts GDP expansion between 6.8% and 7.2% for the upcoming financial year starting April—a modest decline from the current year's 7.4% projection.
Officials cited mounting global turbulence as the primary factor behind the tempered outlook.
Finance Minister Nirmala Sitharaman characterized the trajectory as "Steady growth amid global uncertainty, requiring caution, but not pessimism," according to the survey.
The document elaborated on external headwinds facing India's economy: "For India, global conditions translate into uncertainties rather than immediate macroeconomic stress." It warned that "Slower growth in key trading partners, tariff-induced disruptions to trade and volatility in capital flows could intermittently weigh on exports and investor sentiment."
Currency weakness emerged as another concern, with the survey noting that a depreciating rupee would "cause investors to pause." The Indian rupee plummeted to an all-time low of 91.9850 against the dollar Thursday.
New Delhi's current financial year growth estimate of 7.4% significantly exceeds last year's survey range of 6.3%-6.8%.
The revised 2025-26 projections follow US President Donald Trump's August imposition of 50% tariffs on India—half serving as punishment for New Delhi's Russian oil purchases.
Responding to the American tariff blow, New Delhi slashed goods and services taxes in September to stimulate domestic demand and cushion economic impact.
The federal budget scheduled for February 1 will reportedly unveil additional measures to strengthen the economy and insulate it against tariff disruptions.
India surpassed Japan last year to claim the world's fourth-largest economy position, trailing only the US, China, and Germany, official data confirms.
Trade diversification has become central to New Delhi's strategy. The government finalized a trade agreement with the EU this week, following 2024 pacts with the UK, Oman, and New Zealand. Negotiations continue with approximately twelve additional trade blocs and nations for comparable arrangements.
Officials cited mounting global turbulence as the primary factor behind the tempered outlook.
Finance Minister Nirmala Sitharaman characterized the trajectory as "Steady growth amid global uncertainty, requiring caution, but not pessimism," according to the survey.
The document elaborated on external headwinds facing India's economy: "For India, global conditions translate into uncertainties rather than immediate macroeconomic stress." It warned that "Slower growth in key trading partners, tariff-induced disruptions to trade and volatility in capital flows could intermittently weigh on exports and investor sentiment."
Currency weakness emerged as another concern, with the survey noting that a depreciating rupee would "cause investors to pause." The Indian rupee plummeted to an all-time low of 91.9850 against the dollar Thursday.
New Delhi's current financial year growth estimate of 7.4% significantly exceeds last year's survey range of 6.3%-6.8%.
The revised 2025-26 projections follow US President Donald Trump's August imposition of 50% tariffs on India—half serving as punishment for New Delhi's Russian oil purchases.
Responding to the American tariff blow, New Delhi slashed goods and services taxes in September to stimulate domestic demand and cushion economic impact.
The federal budget scheduled for February 1 will reportedly unveil additional measures to strengthen the economy and insulate it against tariff disruptions.
India surpassed Japan last year to claim the world's fourth-largest economy position, trailing only the US, China, and Germany, official data confirms.
Trade diversification has become central to New Delhi's strategy. The government finalized a trade agreement with the EU this week, following 2024 pacts with the UK, Oman, and New Zealand. Negotiations continue with approximately twelve additional trade blocs and nations for comparable arrangements.
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