New Delhi: According to multiple media sources; India’s top economic advisor has asserted that the country’s strong domestic consumption growth will be able to cushion the economy from the potential fallout of US tariffs, ensuring that growth projections for 2025-26 remain intact.
Chief Economic Adviser (CEA) V. Anantha Nageswaran, speaking at a virtual press briefing on Friday, stressed that despite reciprocal and penal tariffs coming into effect, the government has not revised its growth estimates downward. The real GDP for 2025-26 is projected to expand between 6.3% and 6.8%, as outlined in the Economic Survey 2024-25 tabled in Parliament earlier this year.
“After seeing the resilience of growth in the first quarter and the data for July, we are maintaining our growth range for the full year,” Nageswaran told reporters. “The answer is yes consumption growth and stronger-than-expected momentum will offset the tariff-related negatives.”
The National Statistics Office (NSO) reported that India’s GDP grew 7.8% in April–June 2025, up from 6.5% in the same quarter a year earlier. This momentum, according to the CEA, indicates the economy has the resilience to absorb external shocks.
High-frequency indicators for July suggest the carry-forward of this momentum into Q2, with the upcoming festive season and changes in GST rates expected to give a further push to domestic demand.
Nageswaran pointed to above-normal monsoon rains, higher kharif sowing, and healthy buffer food stocks as positive signals for agricultural output. These, he argued, should help keep food inflation moderate, reducing pressure on households and sustaining consumption demand.
The CEA further noted that the recent sovereign credit rating upgrade by S&P to BBB reflects confidence in India’s “robust macroeconomic fundamentals.”
He also highlighted upcoming reforms including the Task Force for Next-Gen Reforms, expected GST adjustments, state-level deregulation, and a likely softening of interest rates as factors that would lower borrowing costs, attract capital, and spur both consumption and investment.
Despite the optimism, the CEA cautioned that risks remain, particularly in the export sector and capital formation, both of which are vulnerable to tariff disputes and global economic uncertainties.
India continues to hold its place as the world’s fastest-growing major economy. Growth in 2024-25 stood at 6.5%, following a 9.2% surge in 2023-24, and expansions of 8.7% in 2021-22 and 7.2% in 2022-23.
“India’s fundamentals are strong,” Nageswaran emphasized. “Our growth outlook for 2025-26 remains steady at 6.3–6.8%, reflecting confidence in the power of domestic consumption to carry the economy through global headwinds.”