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Indian Economy Projected to Grow 6.3–6.8% in FY26; U.S. Tariffs Seen as Short-Term Risk
Chief Economic Advisor (CEA) V. Anantha Nageswaran on Friday expressed confidence that India’s economy will expand between 6.3% and 6.8% in the current financial year, supported by strong domestic demand. He noted, however, that recent tariff measures by the United States pose a limited downside risk.
The remarks came after the release of first-quarter GDP data showing growth of 7.8%, underscoring economic resilience despite global uncertainties.
“Despite the reciprocal tariffs and penal tariffs (imposed by the U.S.), and after seeing the resilience of Q1 growth, we are retaining the growth rate projections for the current fiscal at 6.3–6.8%,” Nageswaran said at a press briefing in New Delhi.
The U.S. recently imposed tariffs of up to 50% on certain imports, while India levied 25% penal tariffs in response. The CEA described these measures as temporary, adding that both governments are engaged in discussions to remove the penalties and move toward a bilateral trade agreement.
“The high tariffs are expected to be short-lived,” he said.
The Economic Survey presented in Parliament in January projected real GDP growth in the same range for FY26. Nageswaran said domestic factors such as a potential GST rate cut and festive-season demand should help sustain momentum in the coming quarters.
“The downside to the GDP growth forecast for the current fiscal is unlikely to be significant,” he added.
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Published: Aug 30, 2025
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