On September 8, India’s Chief Economic Adviser, V. Anantha Nageswaran, stated in a Bloomberg TV interview that U.S. President Donald Trump’s imposition of 50% tariffs on Indian imports could reduce India’s gross domestic product by approximately 0.5% to 0.6% within the current financial year. The impact hinges on how long the trade restrictions remain in place. Despite this potential drag, Nageswaran affirmed confidence in the government’s projected GDP growth range of 6.3% to 6.8% through March 2026, citing a robust 7.8% expansion in the April-June quarter—the strongest pace in over a year.
The tariffs were introduced last month after Trump accused India of indirectly supporting Russia’s war effort through its purchases of discounted crude oil. As the world’s third-largest oil consumer, India has continued to source Russian oil due to its economic advantage, a decision defended by Finance Minister Nirmala Sitharaman.
In 2024, bilateral goods trade between the U.S. and India totaled $129 billion, with the U.S. running a trade deficit of $45.8 billion. Industry groups estimate that the new tariffs could affect nearly 55% of India’s $87 billion in merchandise exports to the United States. This shift may benefit alternative manufacturing hubs such as Vietnam, Bangladesh, and China, which could gain market share in American supply chains.
— news from Reuters
— News Original —
India’s chief economic adviser says Trump’s tariffs could shave 0.5% off GDP, Bloomberg News reports
Sept 8 (Reuters) – U.S. President Donald Trump ‘s 50% tariffs on India could reduce the country ‘s gross domestic product by half a percent this year, the nation ‘s Chief Economic Adviser V. Anantha Nageswaran said in a Bloomberg TV interview on Monday. n n”Depending upon how long it lasts even in this financial year, it may translate into a GDP impact of somewhere between 0.5% to 0.6%,” he told Bloomberg TV. n nSign up here. n nU.S. President Donald Trump, who is seeking to broker an end to the Ukraine conflict, has said India ‘s oil imports are helping fund Moscow ‘s war effort and last month doubled tariffson imports from India to 50%. n nFinance Minister Nirmala Sitharaman said last week the world ‘s third-biggest oil importer and consumer will continue to buy Russian oil as it proves economical. n nU.S.-India two-way goods trade totaled $129 billion in 2024, with a $45.8 billion U.S. trade deficit, according to U.S. Census Bureau data. n nExporter groups estimate the tariffs could affect nearly 55% of India ‘s $87 billion in merchandise exports to the U.S., while benefiting competitors such as Vietnam, Bangladesh and China. n nNageswaran said he would stick to the government’s 6.3-6.8% growth forecast for the current fiscal year ending in March 2026, citing the April-June quarter’s 7.8% expansion, the fastest in over a year. n nReporting by Angela Christy in Bengaluru and Manoj Kumar; Editing by Kim Coghill