By how much will India be able to evade tariff hit on growth? CEA Nageswaran does the GDP math
“GST reforms will play a very good balance by changing the domestic demand for export demand that may not occur from the United States.” He said.
The United States brought punishing tariffs up to 50% of Indian goods. A few days ago, Nageswaran warned that Trump’s tariffs may fall between 0.5% and 0.6% from India’s GDP, especially if they continued the next financial year.
Economists have widely agreed from the CEA’s point of view, and some estimates show that tariffs can get 30 to 80 basis points from India’s growth in this financial year.
Shilad from the winds
Despite these external winds, India’s quarterly real GDP growth rose to 7.8%, the fastest in five quarters. Nageswaran called it a sign of macroeconomic stability, and saw the tariff shock as a warning to accelerate reforms and diversify exports.
GST revision played a central role in cushioning the economy. Approximately 25% of the consumer price index products are 5% tax from 12% or 18% of the older rates. He says economists can reduce inflation by 50-90 basis points next year. High -frequency data for August showed flexibility in domestic demand. GST collections increased by 6.5% annually, the UPI operations for the first time, the production activity rose to a height of 17 years, and power consumption increased-hepsi continuous internal momentum signals. Some of the latest comments of Cea Nageswaran attributed India’s ability to withstand these shocks to the structural reforms that lasted for years. Bankruptcy and Bankruptcy Law, GST, Real Estate Regulation Law and Public Sector Bank Consolidation, all compliance and general business ease.
CEA also expects the tariff printing to fade in a quarter or two.
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