Trump's 50% tariffs could drag Indian GDP growth below 6% — here's what analysts say

US President Donald Trump issued an executive order on Wednesday imposing an additional 25 per cent tariff on goods from India, saying the country directly or indirectly imported Russian oil.

The additional tariffs mean India will face the highest levy along with Brazil, putting it at a significant disadvantage against regional competitors such as Vietnam and Bangladesh.

The tariffs are scheduled to kick in 21 days from the date of the executive order.

A Prasanna, Chief Economist, ICIC Securities Primary Dealership, Mumbai

The additional tariff will come into effect after 21 days but it will be on top of the earlier 25 per cent so the total 50 per cent rate will be a big negative for Indian exports. However some key segments like electronics and pharma continue to be exempt from this additional rate.

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At 50 per cent rate, many Indian exports will face a handicap versus countries that are in the 15-30 per cent bracket.

Sakshi Gupta, Principal Economist, HDFC Bank, Gurugram

While Trump’s order gives another 21 days for a deal to break through, in case it does not, we will have to significantly lower FY26 GDP growth forecast to below 6 per cent, baking in a 40-50 bps hit. This would be double our earlier estimates (of GDP hit from higher tariffs).

Teresa John, Lead Economist, Nirmal Bank Institutional Equities, Mumbai

The pressure is mounting on India to come to a trade agreement. India may agree to significantly reduce Russian purchases over a phased manner and diversify to other sources.

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Gaura Sen Gupta, Economist, IDFC First Bank, Mumbai

Post this order bilateral tariffs will rise to 50 per cent, which would be the highest applied from August onwards. This definitely increases the downside risk to 2025-26 GDP estimate.

For now if the tariffs persist till March 2026 total downside risk is estimated at 0.3 per cent to 0.4 per cent.

Manoj Mishra, Partner, Grant Thornton Bharat, New Delhi

India’s merchandise exports to the US at around $87 billion in FY25 account for only about 2 per cent of India’s GDP, making it a modest share of the overall economy. The impact, though notable, is unlikely to be severe.

This development reinforces the need to diversify export markets, reduce reliance on any single trading partner, and capitalise on India’s expanding FTA network to build long-term trade resilience and sustain export growth.

Mayuresh Joshi, Head of Equity Research, India, William O’Neil

While markets have already started pricing in the risk of a sharp tariff hike, a near-term knee-jerk reaction is inevitable—unless there’s swift clarity or a breakthrough in negotiations.

India’s crude oil imports have remained diversified — we’ve been sourcing from the US, among others, not just Russia. Russia is just one slice of our broader crude basket.

So, structurally, I don’t foresee a major disruption for Reliance or the OMCs. That said, the broader sentiment—especially around export-driven sectors—could take a short-term hit.

(This is an agency copy. Except for the headline, the copy has not been edited by Firstpost staff.)