50% US tariffs can shave 0.5% off India GDP, CEA V. Anantha Nageswaran says

The 50% US tariffs on India can reduce India's GDP by a half a percent in Fiscal 2026, according to the country's chief economic adviser, but the risks are greater if they spill over into the financial year.

India's Chief Economic Adviser V. Anantha Nageswaran.(PTI)

“I hope the additional penal tariff is a short-lived phenomenon,” Nageswaran told Bloomberg TV’s Haslinda Amin in an interview on Monday. “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%.”

If the tariff uncertainty extends into the next financial year, the impact will be “larger,” resulting into a major “risk” for India, he said.

US President Donald Trump has doubled the tariff on Indian exports to 50% last month as a punishment for buying Russian oil imports. The tariffs are the highest in Asia, making Indian goods uncompetitive compared with those of Vietnam and Bangladesh. The US is India’s biggest export market, and the tariffs are expected to hurt labour-intensive businesses like textiles and jewellery the most.

Nageswaran said he will stick to the government’s growth forecast of 6.3-6.8% for the fiscal ending March 2026, citing strong expansion in the April-June quarter. India’s GDP growth rate stood at 7.8% during the period, the fastest pace in more than a year.

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