Despite facing headwinds from tariffs and a substantial H-1B visa fee, JPMorgan Chase & Co. remains optimistic about India's economic prospects, viewing it as a "bright spot" in the global landscape. This assessment is rooted in India's robust domestic growth and limited reliance on exports.

India's Economic Strengths

Several factors contribute to JPMorgan's positive outlook. India is benefiting from falling inflation, improved system liquidity, and reduced government borrowing, which are expected to support economic expansion. The financial major projects that India will record the highest GDP growth among all countries in its global universe in 2025. Demand-side stimulus and improving urban household finances are also aiding growth. Moreover, a favorable monsoon and a rebound in the rural economy are contributing to the positive outlook.

JPMorgan's Managing Director of Asia Pacific Equity Research, James Sullivan, has presented a compelling forecast: India is on track to become the world's third-largest economy by 2027, with a projected GDP of $7 trillion by 2030. This growth is supported by significant structural changes underway in the Indian economy. There is a projection that the manufacturing sector's contribution to GDP will increase from approximately 17% to nearly 25%. Exports from India are expected to more than double, reaching over a trillion dollars.

Challenges and Concerns

Despite the optimistic outlook, India faces challenges. The recent imposition of tariffs, including a 50% tariff on many goods, and a $100,000 H-1B visa fee, raise concerns.

• Tariffs: South Asia's largest country is now facing some of the highest tariffs in the world – 25% was already in effect at the start of August, and an additional 25% was added on August 27 in response to Indian imports of crude oil from Russia. While the high tariffs are unwelcome, the direct impact is expected to be limited. Approximately 80% of the Indian economy is domestically oriented. Overall, Indian goods exports to the US account for just 2% of India's GDP. However, exports to the US plunged 16% in August 2025 to USD 6.7 billion as tariffs doubled to 50%, eroding competitiveness. Labour-intensive sectors like apparel, jewellery, leather, and seafood face severe stress. If duties persist, India risks losing USD 30-35 billion in US exports, triggering job losses and weakening trade performance into 2026.
• H-1B Visa Fee: The US has imposed a $100,000 annual fee on H-1B visa applicants. India accounts for 71% of H-1B visa holders, mostly in tech sectors. Indian IT firms like TCS, Infosys, and Wipro rely heavily on these visas. The Ministry of External Affairs has said that the H-1B visa fee hike could have humanitarian consequences by way of disruption caused for families. The higher fee makes the H-1B visa economically unviable. The fee could impact their profit margins. Companies are planning to adapt by hiring more local workers in the US. They may also shift work to other countries like Canada and India.

India's Response and Adaptation

The Indian government is pushing a 'Swadeshi' mantra to reduce the economy's reliance on exports, with Prime Minister Narendra Modi calling on Indians to be “vocal for local” and buy Indian goods. In FY25, India's exports to the U.S. was worth over $86,000 million. India's imports from the U.S. was worth $45,000 million. In percentage terms, the U.S. formed around 20% of India's exports and 6.3% of India's imports.

Indian IT companies are planning to adapt to the new H-1B visa fee by hiring more local workers in the US and shifting work to other countries like Canada and India. The industry has steadily reduced its reliance on H-1B hires while building out near-shore delivery capabilities.

Long-Term Outlook

Despite the challenges posed by tariffs and visa fees, the long-term outlook for India remains compelling. The International Monetary Fund projects annual GDP growth of 6.5% over the next five years—positioning India as the fastest-growing major economy. If the RBI can manage to keep inflation close to its 4% target, nominal growth could clock 10–11% annually. JPMorgan Chase CEO Jamie Dimon believes that India's vision to become a $7 trillion economy by 2030 is well within reach.