India plans fresh pro-growth steps amid Trump’s tariffs, trade tensions rise.
Govt asks ministries to draft quick measures boosting ease of doing business.
Goldman Sachs warns US tariffs may cut India’s GDP growth by 0.3%.
Policy focus includes GST review, import diversification, and investment facilitation.
Amid a worsening global trade scenario coupled with rising threats from the US administration including the new Trump tariffs, India is considering to come up with a fresh set of measures to support domestic growth. According to officials, the government has indicated to strengthen the domestic economy by focusing on steps that can further enhance ease of doing business and promote investment-friendly policies.
The Centre has asked all ministries and departments to identify measures that can be quickly rolled out over the upcoming few months. An official aware of these ongoing deliberations told Economic Times, “the message from the highest level is very clear… identify steps that can lift the country’s growth.”
Meetings have been conducted among top government officials in order to brainstorm the measures for the country. Additionally, discussions have also been planned with industry stakeholders so that key areas requiring policy intervention can be identified.
This comes amid India being imposed a 25% tariff on exports by the US. Making it worse, Trump also announced that there will be additional penal duty on India for importing oil from Russia.
According to experts, this move will have a marginal impact on the country’s economy as it is not export-oriented. India exported around $86 billion worth of goods last year to the US. Last week, Goldman Sachs said that US levies could possibly reduce India’s annual gross domestic product (GDP) growth by around 0.3 percentage points.
Policymakers argue that the current pace of the country’s growth is insufficient and thereby more needs to be done in order to deregulate and unshackle the economy. As per projections made by the Reserve Bank of India, a growth rate of 6.5% can be expected for FY26. On the other hand, the International Monetary Fund has forecast 6.4% growth for FY26. Currently, a review of the goods and services tax framework is in the works.
In addition to that, the government is also eyeing measures to ease various procedures and processes that hamper investments and businesses, particularly the need for multiple clearances. Steps that would encourage local manufacturing in strategic and critical sectors are also being identified, apart from ways to cut dependence on a single country for imports. Bringing down touch points for businesses with the government and measures to attract foreign investments into the country are also being looked at.
