U.S. tariffs may pare India’s FY26 real GDP growth by up to 0.3%: Economists

U.S. tariffs to impact 9-11% of India's exports, affecting electronics, precious stones, machinery, and readymade garments.

U.S. President Donald Trump’s tariffs will pare India’s Gross Domestic Product (GDP) growth for fiscal 2026 by a range of 0.2% to 0.4%, according to forecasts by economists.

The Bank of Baroda research cut inflation adjusted GDP growth rate estimates to come in at 6.6%, down from the Union Budget forecast of 6.8%.

Going by the Budget document, the real GDP for India would have been ₹200.7 lakh crore. The tariff effect would reduce this to ₹200.3 lakh crore, as it would grow at a slower 6.6%, according to BoB estimates.

Barclays trimmed estimates to 6.5%, which would mean that GDP would be further lower at ₹200.1 lakh crore.

On inflation, researchers at BoB said it was expected to be caused by exchange rate volatility and the effect would largely be on the whole sale price index (WPI) inflation.

“Our analysis showed that a 10% depreciation in INR can lead to a ~0.12-0.16% increase in WPI in the short run, and 0.38%-0.49% in the long-run.”

On monetary policy, economists at Elara Securities expect RBI to cut rates by 50 basis points in FY26.