Kolkata
High tariffs imposed by the United States on Indian goods pose a serious risk to India’s economic growth, according to a recent report by Crisil Intelligence. The tariffs are expected to affect both exports and investments from India.
Despite this challenge, the report highlights that India’s domestic consumption will likely support growth. This is due to low inflation and recent rate cuts by the Reserve Bank of India (RBI), which have made borrowing cheaper for consumers.
India’s GDP grew by 7.8% in the first quarter of the fiscal year 2025-26, marking the highest growth in five quarters. This is an improvement from 7.4% growth in the same quarter last year. However, nominal GDP growth slowed to 8.8% from 10.8% in the previous year.
The report expects consumer inflation to ease to 3.5% this year, down from 4.6% last year. Good agricultural growth should help keep food prices stable, though the full effects of recent heavy rains are still unclear. Lower crude oil and global commodity prices are also expected to keep other inflation under control.
Regarding monetary policy, Crisil Intelligence predicts the RBI will cut interest rates once more this fiscal year before pausing. The central bank had already lowered rates by 100 basis points between February and June 2025 and is waiting to see the effects of these cuts.
Overall, while US tariffs create challenges, strong domestic demand driven by low inflation and cheaper loans may help India maintain steady growth.
