India-US Tariff War / Americans don't trust Trump's tariff, makes this big prediction about India

India's Chief Economic Advisor V. Anantha Nageshwaran and S&P Global Director Yiphorn Phua said that Trump tariffs will not affect India's growth. India's sovereign rating will remain positive due to reduced trade dependence. The government will soon take steps for the affected sectors.

India-US Tariff War: Recently, India's Chief Economic Advisor V. Anantha Nageswaran claimed that the new tariffs imposed by the US will not have any significant impact on India's economy. At the same time, S&P Global Ratings Director Yifarn Phua has also supported this, but American citizens do not believe it. This article analyzes these statements and their impact on India's economic situation.

US tariffs and India

The US has announced a 25% duty on all Indian products and an additional 25% duty on the purchase of Russian crude oil, taking the total duty to 50%. This policy will come into effect from 27 August 2025. Despite these duties, Yifarn Phua says that it will not have any significant impact on India's economic growth. The reason for this is that India's economy is not trade-oriented. India's export exposure to the US is only around 2% of GDP.

S&P Global Ratings had raised India's sovereign rating from BBB- to positive in May last year, based on India's strong economic growth. The agency estimates India's GDP growth rate to be 6.5% in FY2025-26, the same as last year.

Statement by Chief Economic Adviser

V. Anantha Nageswaran said the challenges posed by the US tariffs are short-term and will end in one or two quarters. He linked the slowdown in economic growth rate in FY2024-25 (from 9.2% to 6.5%) to tighter credit conditions and liquidity problems. He suggested that it is possible to increase real GDP growth by up to 25% through the right agricultural policies.

Nageswaran also mentioned that sectors such as gems and jewellery, shrimp and textiles will have the initial impact of the tariffs, after which the second and third phase effects could be more challenging. The government is in talks with these sectors and a policy response is expected soon.

Global scenario and trade talks

Nageswaran said it is too early to comment on India-US trade talks, citing global instability. The upcoming meeting between US President Donald Trump and Russian President Vladimir Putin in Alaska could impact the talks. He appealed to people to remain patient as the global situation is moving from cooperation to impasse.