India's economy demonstrates resilience amidst global uncertainty, according to Chief Economic Advisor (CEA) V Anantha Nageswaran. Speaking at an AIMA event on September 10, 2025, Nageswaran highlighted India's strong economic position, noting a 7.8% GDP expansion in the first quarter. He refuted claims that India was seeking to create an alternative currency to the US dollar, stating that such a move was not under consideration.

Nageswaran addressed concerns about the potential impact of recently imposed tariffs by the United States. He cautioned that the 50% tariffs imposed by the U.S. could reduce India's GDP by 0.5% in FY26. These tariffs, which took effect on August 27, 2025, include a 25% secondary tariff and a 25% penalty related to India's import of Russian crude oil. He hopes the tariffs are a "short-lived phenomenon". However, he warned that if they continue into the next fiscal year, the impact could be greater and pose a "major risk" to India's growth momentum.

The CEA noted that these tariffs could make Indian exports less competitive compared to regional rivals like China, Bangladesh, and Vietnam. The tariffs are expected to disproportionately affect labor-intensive sectors, including textiles and jewellery. Small and medium-sized enterprises (MSMEs), which constitute a significant portion of India's export base, are particularly vulnerable. It is estimated that about 55% of India's $87 billion exports to the U.S. will be directly affected, impacting sectors like textiles, carpets, automobile parts, marine products, furniture, and steel.

Despite these challenges, Nageswaran affirmed that India is on track to achieve real GDP growth of 6.3–6.8% in FY26, aligning with government projections. He cited the strong expansion in the April-June quarter, during which India's GDP grew by 7.8%, as evidence of the economy's robustness. He also pointed to the potential for a Goods and Services Tax (GST) overhaul to boost India's GDP by an additional 0.2% to 0.3% through improved cost efficiency and business competitiveness. He also stated that recent GST and inflation cuts will prove to be tailwinds for the economy and will boost disposable incomes and spending.

Nageswaran attributed India's economic resilience to a decade of reforms, including upgrades to digital and physical infrastructure and the formalization of small and medium enterprises. He highlighted reforms such as the Insolvency and Bankruptcy Code, the Goods and Services Tax, the Real Estate Regulation Act, and public sector bank consolidation, which have collectively improved the business environment. He also mentioned India's recent sovereign credit rating upgrade from BBB- to BBB, the first in almost 20 years.

While acknowledging the potential negative impact of the U.S. tariffs, Nageswaran expressed optimism that India's strong domestic fundamentals and policy measures would help mitigate the effects over time. He also suggested that the tariff situation could create opportunities for India in some sectors.