Trump’s Shock Tariffs on India Backfired Big Time – Economy Hits 7% Growth Anyway!
India’s latest Economic Survey dropped a bombshell today: Donald Trump’s hefty tariffs on us caught everyone off guard, but our economy didn’t just survive – it sped up.
Finance Minister Nirmala Sitharaman tabled the report in Parliament, pointing out how the US President’s moves threw forecasters for a loop. Back in April, Trump hit India with 25% reciprocal tariffs over trade barriers. Many thought we’d cut a quick deal and come out ahead in his new tariff world. Then, in August, he piled on another 25% penalty on most of our exports to the US – all because we bought cheap Russian oil. Growth predictions tanked right away.
But here’s the twist. India bucked the trend and accelerated anyway, thanks to smart moves from the government. The survey credits a wave of reforms that kicked in last year.
Key wins include the bold GST shake-up in September 2025. They scrapped the 12% and 28% slabs for a simple two-tier system at 5% and 18%. Everyday items got cheaper too, easing the load on middle-class and low-income families. That’s being called the biggest GST revamp since it started.
Other big steps? Private players can now jump into nuclear power, insurance opened up to full foreign investment, and the four new labour codes got the green light – rules should roll out soon. The environment ministry eased green cover rules for industries based on pollution levels, ditching the flat 33% requirement. They also paused overly strict quality control orders that were hurting smaller businesses.
The report talks up a new energy in government policy. Fast forward, and we’re eyeing over 7% real GDP growth for the full year, with more of the same next year.
Still, there’s a catch. The survey flags a weird paradox: India’s best macro performance in decades is clashing with a global setup that doesn’t reward strong economies with stable currencies or easy capital flows anymore.
Trump’s double whammy of 25% base tariffs plus 25% extras last year stemmed from our trade practices and oil deals. Yet, these reforms show India can pivot and thrive amid the chaos.
