India has suffered a major setback on the economic front between the tariff war. Actually, an important report has come out about the economic pace of the country. Financial service firm Moody’s Analytics reduced India’s GDP (GDP) growth estimate for the calendar year 2025 to 6.1 percent. This estimate has been reduced in view of gems and jewelery, medical equipment and threat of US fees on textile industries.
This thing will affect
Moody’s Analytics, the unit of Moody’s Ratings, said, India’s largest business partner is America. The imposition of 26 percent duty on imports from India will have a huge impact on trade balance. Moody’s Analytics accepted the 90 -day ban on most charges and a 10 per cent rate in their place, saying that the April Aadhaar line shows that if the tariffs are finally fully implemented, it would cause economic loss.
It said that the announcement of tax incentives earlier this year should help the domestic economy to reduce the impact of fee compared to other economies at encouragement and risky economies.
RBI will cut
Moody’s further said, since gross inflation is decreasing at a good speed, we hope that the RBI will reduce the repo rate, which will probably be as a reduction of 0.25%. This will reduce the policy rate by 5.75% by the end of the year. He said- Domestic economy will get boost from the tax incentives announced this year and will help reduce the shock of fees on overall growth compared to other weak economy.
RBI changed its monetary policy and cut 25 basis points after the AppPC meeting. After this, RBI’s repo rate is currently 6 percent. Along with this, RBI has reduced the estimate of inflation to 4 percent for the financial year 2026.
Significantly, US President Donald Trump has put a brake on 75 countries for 90 days on the tariff to be implemented from April 9. However, not giving any concession to China, this rate of tariff on it has increased to 125 percent. A 10 percent tariff will be applicable from April 5.