By Admin 
Indian Economy: After a year long negotiations between America and India, the trade deal was finally sealed. Under this, America has now reduced the tariff on import of Indian goods to 18 percent. Leading brokerage firm Goldman Sachs has indicated a positive macroeconomic outlook for India after this deal.
Goldman’s estimate regarding GDP growth
Goldman has said in its report that after the implementation of the trade deal, there will be a reduction in the tariff rate for India, which will bring it at par with other Asian countries which have about 15-19 percent tariff. Estimating the deal’s impact on India’s economic growth, Goldman Sachs said, “We estimate that if the new lower tariffs are implemented, GDP will increase by about 0.2pp (annually).” This estimate is based on India’s goods export exposure, which is about 4 percent of GDP, and US final demand and goods export demand elasticity of about 0.7.
The report on investment sentiment said that completion of the deal will reduce trade-policy uncertainty and improve private investment intentions. It was also said that the recovery in private capex in the second half of CY26 may further increase real GDP growth. In view of all these reasons, Goldman Sachs said, “Overall, we are increasing our CY26 real GDP growth forecast by 20bp to 6.9 percent annually.”
This is also the advantage of having a deal
From the external balance perspective, the report states that due to reduction in tariffs on India’s exports, it is estimated that the current account deficit will reduce from about 0.25 percent of GDP to 0.8 percent of GDP in 2026.
Goldman Sachs also said that financial conditions may improve due to reduced trade tension. “Recovery in capital flows will ease some pressure on the rupee.”
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