'No major downside': CEA V Anantha Nageswaran asserts US tariffs' impact to be short-lived; pegs India’s FY26 GDP growth at 6.3-6.8%

Chief Economic Advisor V Anantha Nageswaran on Friday said India’s economy is expected to grow between 6.3% and 6.8% in FY26, adding that high US tariffs are unlikely to cause any significant downside risks. He stressed that the tariff impact will be temporary and will not derail India’s growth momentum.

Impact of high US tariffs to be short-lived, said CEA Nageswaran.


“Despite the reciprocal tariffs and penal tariff (imposed by US), and after seeing the resilience of Q1 growth we are retaining the growth rate projections for current fiscal at 6.3–6.8%,” Nageswaran told reporters.

The Economic Survey tabled in Parliament in January had also projected real economic growth at 6.3–6.8% for FY26.

The CEA expressed optimism that aggregate demand growth will hold steady, supported by an expected GST rate cut and festive season demand boosting consumption.

Official data showed the economy expanded 7.8% in April–June, the fastest pace in five quarters and well ahead of China’s 5.2% in the same period. The robust growth was driven by the farm sector, which recorded a 3.7% increase compared with 1.5% a year earlier, according to the National Statistical Office (NSO).

The April–June growth rate was the highest since 8.4% recorded in January–March 2024. Manufacturing also held steady, rising 7.7% in Q1 against 7.6% in the same quarter of 2024-25.

Manufacturing activity remained broadly steady, with growth at 7.7% in the first quarter of FY26 compared with 7.6% a year earlier.

Earlier this month, the Reserve Bank of India projected real GDP growth at 6.5% for FY26, with estimates of 6.5% in Q1, 6.7% in Q2, 6.6% in Q3 and 6.3% in Q4.