India’s economy may take a hit from US President Donald Trump’s latest tariff move. Chief Economic Adviser (CEA) V. Anantha Nageswaran said on Monday that the 50% duty imposed on Indian imports could shave off around half a percent from the country’s GDP this year, reported Bloomberg.
While speaking to Bloomberg TV, Nageswaran explained that the impact could widen if the higher tariffs remain in place longer, with GDP losses estimated between 0.5% and 0.6% this year.
Trump doubled tariffs on Indian goods last month, arguing that New Delhi’s imports of Russian oil were helping to fund Moscow’s war in Ukraine. Despite the criticism, Finance Minister Nirmala Sitharaman recently said India, the world’s third-largest oil consumer, would continue to buy Russian crude as it remains economical.
The United States and India recorded two-way goods trade worth $129 billion in 2024, according to US Census Bureau data. The US had a $45.8 billion trade deficit with India during the period. Exporter groups fear the fresh tariffs could hurt nearly 55% of India’s $87 billion worth of shipments to America, giving rivals like Vietnam, Bangladesh, and China an edge.
Still, Nageswaran noted that India’s overall growth outlook remains steady. He stuck to the government’s forecast of 6.3–6.8% GDP expansion for the fiscal year ending March 2026, pointing to the strong 7.8% growth recorded in the April–June quarter, the fastest pace in over a year.
The tariff dispute comes at a time when New Delhi is trying to balance economic priorities with geopolitical pressures, especially as global trade tensions rise.
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