Impact of Trump's Tariffs on India's Economy

The tariffs introduced under US President Donald Trump’s administration could drag down India’s economic growth by as much as half a percentage point, finance secretary Seth said. Speaking in Washington, Seth highlighted the potential for these measures to shave off between 0.2 to 0.5 percentage points from GDP growth.

Long-Term Growth and Development Goals

While optimistic about India’s potential to reach a 7% growth rate in the next decade, Seth emphasized the need for faster growth to meet long-term development goals. An Indian delegation is currently in the US for trade talks, though specifics remain undisclosed.

Global Trade Downturn and WTO Forecasts

The warning comes as the World Trade Organisation predicts a 0.2% decline in goods trade for 2025, citing shifting US trade policies and tensions with China. Severe tariffs could exacerbate this, leading to a 1.5% global trade slump.

Potential Breakthrough in US-India Trade Relations

US Treasury Secretary Scott Bessent hinted at a possible bilateral deal to avoid steep tariffs, praising India for fewer trade barriers and minimal government subsidies. Meanwhile, US Vice President JD Vance urged India to open up more to American exports.