Patna: India’s Finance Secretary Ajay Seth has warned that recent U.S. tariff measures could shave off 0.2 to 0.5 percentage points from India’s GDP growth.
Speaking at a Hudson Institute event during the IMF-World Bank Spring Meetings in Washington, Seth noted that although India is on track for 6.5% growth in the current fiscal year, global trade disruptions may indirectly dampen domestic economic momentum.
The warning comes amid heightened concerns over protectionist policies globally, with Seth stating that India is engaging in trade negotiations with the U.S., though he did not reveal specific details of any upcoming meetings.
The International Monetary Fund (IMF) recently trimmed its growth forecast for India from 6.5% to 6.2% for FY25, citing trade tensions and external headwinds. Similarly, the World Bank revised its projection for India down to 6.3% from an earlier 6.7%, pointing to uncertainties in private investment and global demand.
Despite the external challenges, India’s economy has remained resilient. In April, private sector activity hit an eight-month high, with the HSBC flash India Composite PMI rising to 60.0, driven by strong manufacturing exports. Additionally, a favorable monsoon outlook and a significant drop in retail inflation are expected to support consumption and price stability.
Seth said,that while tariffs pose a challenge, India’s economic fundamentals remain strong enough to weather the storm.
