1.6 lakh crore shock from Trump Tarifs! Large loss to Indian Economy despite GST relief.

V. Anant Nageswaran, Chief Economic Advisor to the Government of India, has warned in an interview recently that the tariffs imposed by former US President Donald Trump can cause a loss of about ₹ 1.6 lakh crore (0.5%of GDP) to the Indian economy. This loss will depend on the period of Tarifs – if they are further extended, the effect can be felt by the next financial year. However, he expressed confidence that India’s real GDP growth is likely to be between 6.3% to 6.8%. He also said that the government will reduce GST rates on more than 400 items and increase the domestic consumption from Income Tax Relief in February Budget. It is estimated that it will provide a consumption boost of ₹ 5.3 lakh crore, which will compensate for the damage caused by the tariff. But the challenge does not end here – US Treasury Secretary Scottary Scott Bessent has indicated that additional sanctions and tariffs can be imposed on the countries who buy oil from Russia, which can lead to loss. Nevertheless, Finance Minister Nirmala Sitharaman has clarified that India will continue to purchase oil from Russia.