India is expected to maintain a GDP growth rate between 6.3% and 6.8% in FY 2025-26, even as global concerns mount over newly announced tariffs by US President Donald Trump. According to a senior finance ministry official, this projection is likely to hold if crude oil prices stay under $70 per barrel.
The reaction comes in light of Goldman Sachs lowering India’s growth outlook by 20 to 40 basis points, now placing it at 6.1% for FY 2025-26. Economists attribute the dip to escalating trade tensions triggered by the US imposing a 26% tariff on Indian imports, with even higher rates targeting other major economies like China.
One of the most vulnerable sectors is India’s diamond export industry, which depends heavily on US demand. The sector is expected to take a major hit, threatening thousands of jobs.
Officials have confirmed that discussions are underway with key ministries and export associations to analyze the overall impact and possible responses. At least four to five proposals have been submitted to support the affected industries. These include extension of interest subsidies, export diversification support, and access to additional bank credit.
A separate finance official stated that while the situation is being closely monitored, India’s fiscal stability is not expected to be significantly impacted by the current trade shifts.
India reportedly does not plan to retaliate immediately, instead favoring a negotiation route to de-escalate tensions.
The stock market reacted sharply to global concerns, with the Sensex plummeting over 3,900 points in early trade on Monday. Investors lost more than ₹20 lakh crore in market value as the index logged one of its steepest falls since the COVID-19 pandemic.
