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India's GDP Growth Forecast at 6.3-6.8% for FY26, GST Cuts to Cushion Impact of US Tariffs
India’s economic outlook for the fiscal year 2025-26 remains optimistic, with the country projected to achieve GDP growth between 6.3% and 6.8%. This forecast reflects a balance between external challenges, such as recent U.S. tariffs on Indian exports, and strong domestic demand supported by consumption and government reforms, including recent reductions in GST rates. The Chief Economic Advisor of India highlighted that these tax cuts will partly counteract the impact of tariffs, helping to sustain growth momentum despite global uncertainties.The national finance and business highlights for India on September 10, 2025, include positive market movements, key corporate updates, and economic forecasts.
India's Chief Economic Advisor, V. Anantha Nageswaran, stated that the recent reductions in the Goods and Services Tax (GST) rates are expected to partially offset the negative impact of higher U.S. tariffs on Indian exports. The U.S. imposed steep tariffs of up to 50% on many Indian goods, which could reduce India's GDP growth by about 0.5% to 0.6% in the fiscal year 2025-26. Despite this challenge, Nageswaran remains confident that India's GDP will grow between 6.3% and 6.8% for the year, supported by strong domestic consumption and resilient economic performance in the first quarter, which saw a 7.8% growth.
The GST reform, coming into effect soon, is aimed at boosting consumption by lowering tax rates on many products, thereby increasing
disposable income and business competitiveness. This reform is expected to contribute an additional 0.2% to 0.3% growth to the economy
by improving cost efficiency. While the U.S. tariffs pose a risk, the overall economic outlook remains positive due to the strong internal
demand and government measures to support growth.
This balanced approach highlights India’s resilience despite external trade challenges and reinforces optimism for sustained economic
expansion in the upcoming fiscal year.
India's Chief Economic Advisor, V. Anantha Nageswaran, stated that the recent reductions in the Goods and Services Tax (GST) rates are expected to partially offset the negative impact of higher U.S. tariffs on Indian exports. The U.S. imposed steep tariffs of up to 50% on many Indian goods, which could reduce India's GDP growth by about 0.5% to 0.6% in the fiscal year 2025-26. Despite this challenge, Nageswaran remains confident that India's GDP will grow between 6.3% and 6.8% for the year, supported by strong domestic consumption and resilient economic performance in the first quarter, which saw a 7.8% growth.
The GST reform, coming into effect soon, is aimed at boosting consumption by lowering tax rates on many products, thereby increasing
disposable income and business competitiveness. This reform is expected to contribute an additional 0.2% to 0.3% growth to the economy
by improving cost efficiency. While the U.S. tariffs pose a risk, the overall economic outlook remains positive due to the strong internal
demand and government measures to support growth.
This balanced approach highlights India’s resilience despite external trade challenges and reinforces optimism for sustained economic
expansion in the upcoming fiscal year.