US tariffs could shave off 0.6% from India's GDP: Adviser
India's Chief Economic Adviser, V Anantha Nageswaran, says the new 50% tariffs from US President Trump could shave as much as 0.6% off India's GDP this year.
These tariffs—introduced last month—mainly hit Indian exports like textiles and jewelry, and are a response to India buying Russian oil.
Tariffs put India at a disadvantage
These are the steepest US tariffs on any Asian country right now, putting India at a disadvantage compared to rivals like Vietnam and Bangladesh.
Nageswaran told Bloomberg TV on September 8 that "depending upon how long it lasts... it may translate into a GDP impact of somewhere between 0.5% to 0.6%."
Growth forecast remains unchanged
Despite the hit, Nageswaran is sticking with the government's growth forecast for 2025-26: between 6.3% and 6.8%.
He points to strong early growth this year (7.8%), lower inflation, recent tax cuts, and GST tweaks as reasons for hope.
Hope tariffs are temporary
Nageswaran hopes these tariffs are just temporary but warns if they drag on into next year, the impact could be larger, affecting labor-intensive sectors like textiles and jewelry.