India Maintains Growth Projection for 2025/26 Amid U.S. Tariffs
India maintains its growth projection of 6.3% to 6.8% for 2025/26, contingent on oil prices. Despite concerns regarding U.S. tariffs, officials express confidence in fiscal parameters. The government is ready to assist affected exporters and does not intend retaliation against U.S. tariffs as talks progress.
India is poised to achieve its growth target of 6.3% to 6.8% for the 2025/26 fiscal year, contingent on oil prices remaining under $70 per barrel, according to a finance ministry official. This projection is made amidst the backdrop of global disruptions attributed to new U.S. tariffs that have stirred uncertainty in international markets, evident from significant declines in major Asian stock indices on Monday.
Some economists estimate that the tariffs imposed by U.S. President Donald Trump could slow India’s growth by 20 to 40 basis points in the current financial year. Sectors such as India’s diamond industry, which relies heavily on U.S. exports accounting for over a third of its market, could face severe repercussions, jeopardizing numerous jobs within the sector.
However, another finance ministry official indicated that the announced tariffs would not have a significant impact on India’s key fiscal metrics for the 2025/26 period. The official also noted that India remains open to implementing further measures to support exporters adversely affected by the increased U.S. tariffs.
“We have already made provisions in the budget for duty remission schemes to help exporters and are open to doing more,” stated the official. Both officials chose to remain anonymous due to restrictions on media communications.
As efforts continue towards a trade deal, it has been indicated that India does not intend to retaliate against the 26% tariff imposed by the U.S. on imports from India, as reported by Reuters. The Indian finance ministry has not provided an immediate response to inquiries regarding the matter.
In light of the tariffs imposed by the United States, India projects a growth rate of 6.3% to 6.8% for the fiscal year 2025/26, provided oil prices remain manageable. While some sectors may face challenges due to these tariffs, particularly the diamond industry, the Indian government is prepared to support exporters and does not seek retaliatory measures at this time. Overall, the economic outlook remains cautiously optimistic under current projections.
Original Source: www.hindustantimes.com
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