US Tariffs May Slow India's Economic Growth: Morgan Stanley

If the recently announced US tariffs on Indian goods persist for a longer period, the impact on India's economic growth could be between 0.4 per cent and 0.8 per cent, Morgan Stanley has said in a report.

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The US has increased tariffs on Indian goods to 50 per cent. According to the report, if tariffs remain at these high levels for 12 months, India's growth could see downside risks, assuming no mitigating factors.

"To assess the impact of tariffs on India's GDP, we use inferences from the input-output table modelled by our global team," the report said.

The report analyzed that assuming all goods exports are subject to a 50 per cent tariff rate, the direct impact on growth is likely to be 60bps (basis points), while the indirect impact could be of a similar magnitude over a 12-month period.