Trump tariff: Only 0.1% impact on India's GDP likely; domestic economy resilient, says PHDCCI

Industry body PHDCCI today said the Trump tariff will have only a 0.1% impact on India's GDP, citing the resilience of the domestic economy.

"Given India’s price competitiveness and supportive government policies, we expect GDP to see only a 0.1% impact," PHDCCI said.

"Strong domestic manufacturing, continued government support through strategic policy measures—including the production-linked incentive (PLI) scheme, Make in India, and Atmanirbhar Bharat—will bolster India’s economic resilience," said Hemant Jain, President, PHDCCI.

"India’s robust industrial competitiveness will offset the impact of U.S. tariff announcements, and GDP will see only a 0.1% impact in the short term," Jain said, adding that this shortfall will be negated in the medium term.

"India’s Make in India initiative is driving significant progress towards self-reliance. The strengthening of domestic consumption will easily absorb the tariff impact. India’s strong demand outlook bodes well for sectors such as electronics, renewable energy, and pharmaceuticals," he added.

"The ease of doing business and PLI schemes have strengthened domestic supply chains, making India more attractive for investments, boosting manufacturing output, and enhancing competitiveness," Jain noted.

India is a major consumer market with diversified supply and value chains and emerging trade partnerships with regions including the Middle East, South Africa, Latin America, and Asian nations. Demand for Indian products has increased in recent years due to price competitiveness and improved quality, Jain added.

"Looking ahead, given India's sustained economic development and strategic importance, we anticipate continued collaboration with the U.S. through a well-negotiated bilateral trade agreement," he said.