Trump's Tariff Threat and India's Economic Outlook

US President Donald Trump has issued a stark warning about potentially increasing tariffs on India beyond the current 25%, a move that could have significant implications for India's economy. RBI governor Sanjay Malhotra has expressed the difficulty in predicting the full impact of these tariffs on India's GDP growth.

RBI's Stance on GDP Growth: Despite the uncertainty, the RBI has retained its GDP growth forecast at 6.5% for the fiscal year 2025-26, following a recent monetary policy review that kept the repo rate unchanged at 5.5%.

Uncertainty and Vigilance

Malhotra highlighted the challenges in assessing the impact of US tariffs, noting that while some global uncertainties have been factored into the revised growth forecast, the situation remains highly unpredictable. The RBI plans to maintain close vigilance on incoming data to make informed decisions.

Trade Negotiations and Hope for Resolution

On the topic of India-US trade deal talks, Malhotra remained hopeful for an amicable solution, emphasizing the ongoing nature of trade negotiations amidst these challenging times.

Donald Trump's Warning

Trump's comments about India not being a good trading partner and his intention to substantially raise tariffs within 24 hours have added to the tensions, with the US administration criticizing India's crude oil imports from Russia.