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Will Donald Trump tariffs slow down India's projected growth? Finance ministry officials, economists react
India is projected to achieve 6.3%-6.8% growth for fiscal 2025/26, despite lowered growth estimates due to US tariffs, a finance ministry official
India is likely to meet its projected growth target of 6.3%-6.8% for the fiscal year 2025/26 if oil prices remain below $70 ( ₹5,810)/barrel, despite global disruptions due to US tariff announcements, a Union finance ministry official said.
The reaction from the Indian government officials comes from even economists, including at Goldman Sachs, who have lowered India's growth estimates by 20-40 basis points to 6.1% for the current 2025/26 financial year, citing the impact of the global tariffs imposed by US President Donald Trump.
A 26% tariff on Indian imports, with even higher levies on other countries like China, has escalated global trade tensions, with major stock indices plunging in Asia on Monday.
India's diamond industry, which ships more than a third of its exports to the US, is expected to be among the worst-hit sectors, putting thousands of jobs at risk.
The officials said discussions are underway with ministries and exporters' associations to assess the fallout.
The Union finance ministry has already received four to five proposals from the commerce ministry to support export industries, including an extension of interest subsidy scheme, aid for diversification, and increased bank credit, a second official told Reuters.
"We are still studying the impact of tariff hikes on the export sectors and the decision could be taken at the appropriate time," Reuters quoted the official as saying.
A third finance ministry official, however, said the tariffs would not weigh heavily on India's key fiscal parameters for the 2025/26 year.
India's finance ministry did not immediately respond to an e-mailed request for comment, the news agency added.
The agency earlier reported that India does not plan to retaliate against Donald Trump's tariffs as officials try to negotiate a resolution.
On Monday, investors' wealth eroded sharply by ₹20.16 lakh crore as the benchmark indices faced heavy drubbing, with the Sensex dropping over 5 per cent, amid a global market meltdown due to growing trade war concerns.
The 30-share BSE benchmark tumbled 3,939.68 points or 5.22 per cent to 71,425.01 in early trade.
