US tariff impact: India's FY26 GDP growth likely to take 60-bp hit

Economists expect India's FY26 GDP to face a 35-60 bps hit from US tariff hike; strong domestic demand may cushion the blow but targeted support may be needed

The US’ move to raise the tariff on most Indian goods to 50 per cent could drag India’s GDP growth for FY26 by 35 to 60 basis points, according to various economists. One basis point (bp) is equal to 0.01 per cent. 

While domestic consumption may avert a huge blow to growth, experts feel that it would still be a setback for the economy and may require government intervention.  

“If 50 per cent tariff sticks then there could be an impact of 40 to 60 bps on our baseline forecast of 6.3 per cent,” said Sakshi Gupta, principal economist, HDFC