New Delhi: The Indian government is actively developing a plan to address the significant 50 percent tariff increase imposed by the United States on goods exported from India, according to Economic Affairs Secretary Anuradha Thakur.
Thakur mentioned that some sectors, particularly those that rely heavily on employment and have connections to the U.S., might experience challenges due to this tariff hike. She assured that the government is aware of these potential impacts and is exploring effective solutions.
The Secretary of the Department of Economic Affairs shared that the government has already initiated some measures and is planning more to boost domestic demand. This, she noted, could help support factories that are feeling the pressure from U.S. tariffs.
As part of the recent Budget, the government announced a zero income tax for individuals earning up to ₹12 lakh under the new tax structure, translating into significant savings for many taxpayers. Furthermore, plans for adjusting GST rates were introduced, which are expected to reduce prices on various goods.
A favorable monsoon season is also anticipated to enhance agricultural production, thereby increasing demand in rural areas.
Thakur expressed optimism that the government is on course to achieve its fiscal deficit goal of 4.4 percent, despite encountering some temporary variations in recent monthly figures.
This statement is important as the government’s fiscal deficit reached 29.9 percent of its annual target by the end of July, up from 17.2 percent during the same timeframe the previous year.
She emphasized that while there have been concerns regarding the fiscal target based on recent statistics, evaluating the fiscal deficit on a monthly or quarterly basis may not portray the complete picture due to timing differences in revenues and expenditures. Overall, she believes the government will meet its target.
For the fiscal year 2025-26, the government has projected a fiscal deficit of 4.4 percent of GDP, amounting to around ₹15.69 lakh crore.
Thakur underlined the strength of the country’s economic fundamentals, highlighting that recent figures on private consumption also show positive trends.
Data on gross capital formation indicates that both public and private investment remain strong, with expectations of this trend continuing in the coming months.
She noted that government spending has played a crucial role in supporting economic stability, contributing to both fiscal deficit management and robust growth figures.
Commenting on the GDP growth of 7.8 percent for the June quarter, Thakur stated that this reflects the diverse nature of India’s economic development.
She remarked, “The first-quarter numbers illustrate the resilience of our economy, demonstrating strong momentum backed by solid macroeconomic fundamentals.”
Looking ahead, she highlighted key growth drivers such as strong performance in manufacturing, construction, and services, along with robust agricultural output and resilient domestic demand.
India’s economy grew by an impressive 7.8 percent in the April-June period, marking its fastest growth rate in five quarters. This growth was largely fueled by agriculture and supported by sectors like trade, hospitality, finance, and real estate, according to the latest government reports.
The previous highest growth rate was recorded at 8.4 percent during January-March 2024.
With this performance, India continues to be the fastest-growing major economy, outpacing China’s GDP growth of 5.2 percent in the same quarter.
