India’s economy grew faster than predicted in the April–June quarter, defying forecasts of a slowdown. Gross Domestic Product (GDP) expanded by 7.8%, up from 7.4% in the previous quarter, and well above the 6.7% growth projected in a Reuters poll, according to government data released on Friday.
The Gross Value Added (GVA), a more reliable measure of economic activity that excludes indirect taxes and government subsidies, rose 7.6%, compared with 6.8% in January–March 2025. GVA growth reflects the performance of key sectors such as manufacturing, services, and agriculture, providing a clearer picture of the economy’s strength.
Rising US Tariffs: Challenges for Exports
The positive growth comes amid rising international trade pressures. The United States recently doubled tariffs on Indian goods to 50%, the steepest among its trading partners alongside Brazil. The move was triggered by India’s continued purchase of discounted Russian oil, which Washington says undermines sanctions on Russia.
Key export sectors such as textiles, leather, chemicals, and engineering goods are expected to face headwinds. Economists warn that prolonged tariffs could affect export revenues and employment in export-oriented industries.
India Remains a Growth Leader
Despite external pressures, India continues to rank as one of the fastest-growing major economies. Strong domestic demand, ongoing structural reforms, and high investment activity have supported resilience. Initiatives like production-linked incentives (PLI), financial inclusion programs, and infrastructure development have further bolstered industrial output and consumption.
Opportunities Amid Challenges
While US tariffs present challenges, they also open doors for India to diversify its trade. Countries in Europe, Southeast Asia, and the BRICS bloc represent potential markets for Indian exports. Expanding trade with these regions can reduce reliance on the US market, strengthen geopolitical ties, and enhance export revenues.
India’s manufacturing base, skilled workforce, and innovation in pharmaceuticals, IT, and green energy make it an attractive partner for global trade beyond the US. Analysts suggest that strategic partnerships, bilateral trade agreements, and export diversification can help India convert these headwinds into long-term growth opportunities.
Moreover, the current scenario also emphasizes the importance of exploring new international markets beyond the US. By strengthening trade ties with Europe, Southeast Asia, and BRICS nations, India can diversify its export base, enhance revenue streams, and maintain long-term economic momentum. The country’s skilled workforce, expanding manufacturing base, and innovation-driven sectors such as IT, pharmaceuticals, and green energy position it well to convert challenges into growth opportunities.
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