India forecasts steady growth despite Trump tariffs

The South Asian nation’s Economic Survey has projected GDP expansion of up to 7.2% on the back of strong domestic demand

India’s economy is projected to record steady growth in the 2026-27 financial year, powered by strong domestic demand despite the impact of US tariffs, the South Asian nation’s Finance Ministry said on Thursday.

The federal government’s Economic Survey tabled in parliament on Thursday projected GDP growth in the next financial year, which begins in April, to be between 6.8% and 7.2%, only slightly lower than the current year’s projection of 7.4%.

The survey attributed the marginal slowdown to global volatility weighing on the outlook.

“Steady growth amid global uncertainty, requiring caution, but not pessimism,” Finance Minister Nirmala Sitharaman said in the survey.

VIDEO | Delhi: On the Economic Survey, Rumki Majumdar, Economist, Deloitte India, says, “I note that the Economic Survey projects growth of about 6.8 to 7.2 per cent next year, higher than market expectations, indicating strong economic momentum and resilience despite global… pic.twitter.com/Elkr4OsnxK

— Press Trust of India (@PTI_News) January 29, 2026

“For India, global conditions translate into uncertainties rather than immediate macroeconomic stress,” the survey said. “Slower growth in key trading partners, tariff-induced disruptions to trade and volatility in capital flows could intermittently weigh on exports and investor sentiment.”

The survey also acknowledged that a weak currency would “cause investors to pause.” India’s rupee slid to a record low of 91.9850 against the dollar on Thursday.

New Delhi’s projection of this financial year’s growth of 7.4% is above the 6.3%-6.8% range forecasted in last year’s survey.

The upward revision in the projected figures for 2025-26 comes after US President Donald Trump imposed a 50% tariff on India in August, half of which was a punitive measure for New Delhi’s purchases of Russian oil.

To mitigate the impact of the US tariff and boost demand, New Delhi slashed the goods and services tax in September.

The federal budget to be presented on February 1 is expected to include measures to bolster the economy and ring-fence it from tariff shocks, according to reports.

Last year India overtook Japan to become the world’s fourth largest economy behind the US, China, and Germany, according to official figures.

India is also trying to diversify its trade basket. New Delhi finalized a trade deal with the EU this week, after signing pacts with the UK, Oman, and New Zealand last year. It is in talks with nearly a dozen trade blocs and countries for similar deals.