Can India hit FY26 GDP growth target despite Trump tariffs? Here's what report says

India is likely to achieve its projected GDP growth of 6.3% to 6.8% in the 2025-26 fiscal year, provided crude oil prices remain below $70 per barrel, reported Reuters citing a government official, even as global markets face headwinds from US tariff measures.

The official’s remarks come amid heightened global uncertainty following US President Donald Trump’s move to impose sweeping tariffs on trading partners, triggering a fresh trade war that sent Asian stock indices tumbling on Monday.

In early trade on April 7, Brent crude fell nearly 4% to $63.21 per barrel, its lowest in nearly four years, while US benchmark West Texas Intermediate dropped to $59.79.

Despite the external shocks, another finance ministry official asserted that India's core fiscal outlook for FY26 remains intact, according to the report.

Some economists warn, however, that the Trump administration’s latest tariffs could dent India’s economic momentum.

India’s diamond and jewelry sectors, which account for over $10 billion in annual exports, are among the most vulnerable. With new tariffs raising duties on loose diamonds and gold jewelry to as high as 20%, the employment-intensive industry could face major disruption.

Despite the risks, New Delhi is not expected to retaliate. According to a Reuters report, India remains engaged in constructive trade negotiations with the US and sees scope for exemptions under clauses for countries undertaking "significant steps to remedy non-reciprocal trade arrangements.”

In bilateral trade talks held last month in New Delhi, both sides agreed to pursue a comprehensive Bilateral Trade Agreement (BTA) with an ambitious target of $500 billion in two-way trade by 2030, a vision laid out during Prime Minister Narendra Modi’s February visit to Washington.

India has already taken goodwill measures to strengthen ties with Washington, including slashing duties on high-end motorcycles and bourbon, and scrapping the digital services tax that had drawn criticism from US tech firms.

Commerce Minister Piyush Goyal is expected to hold further talks with US officials later this year to finalise an initial tranche of the agreement by fall 2025.