Should India Brace Up For Lower GDP Growth Rate? CEA Says No; Outlines Risks & Measures From Trump's Tariffs

New Delhi: India's Chief Economic Adviser (CEA), Dr V Anantha Nageswaran, was on Monday quoted explaining the risks to India's economy from tariffs imposed by the United States.

The United States under President Donald Trump had imposed a 25 percent primary tariff but soon followed with a 25 percent additional penalty.

CEA Dr Nageswaran highlighted how an imposition of 50 percent tariffs could impact India. He said, it was likely to "shave-off" India's GDP growth by around 0.5 - 0.6 percent for FY26.

Bilateral trade between India and United States is estimated at $87 billion according to official data from India's commerce department. India's export basket, predominantly, comprises of merchandise goods such as textiles, carpets, marine products, and agro-products. In recent years, India's export-basket has included service-oriented sectors.

Despite the gloom post the tariffs, the CEA opined that overall GDP growth rate forecast for FY26 was between 6.3 to 6.8 percent. In his interaction with Bloomberg, the CEA expressed confidence in India's economy.

He pointed strong GDP growth and performance in the first quarter of the fiscal as having reflected robust demand and economic resilience of India.

Elaborating on the untimely tariffs, he expressed hope that trade discussions and negotiations could enable a recalibration of the secondary tariffs.

The CEA also expressed optimism with the government's recent set of reforms (referring to the GST reforms announced by Finance Minister Nirmala Sitharaman). He was reported as saying that GST reforms could boost GDP by 0.2 to 0.3 percent - improving efficiency and competitiveness.

Tariff has emerged as a cause of concern in China too. On Monday, the South China Morning Post published a report explaining how outbound shipments from China grew only 4.4 percent for August 2025 as against a forecast of 5.4 percent. In July, the outbound shipments grew 7.2 percent.