Will have no impact on MPC policy: Experts

Another aspect is it may open up room for improving India's global trade

- ENS ECONOMIC BUREAU @ Mumbai

ECONOMISTS see 27% reciprocal tariffs on Indian shipments to the US will shave 30-90 bps off the domestic economic output this fiscal.

However, some see this as a silver-lining for the country, which may open up room for improving our global trade because tariff rate for India is much lower than its Asian peers. As per Tanvee Gupta Jain, chief economist at UBS Securities India, "Our base case forecast for GDP growth at 6.3% for FY26, which already incorporates 25 bps of negative drag from tariff hikes. However, the sheer magnitude of what is being proposed now under the new tariff hikes suggests further downside risk to the growth forecast to the tune of 30-55 bps."

She further said at 27% the reciprocal tariff on India due to take effect from April 9, 2025, is much higher than market expectations but lower than tariffs on Asian peers (54% for China, bringing the weighted ad valorem rate to 63%), 46% for Vietnam, 36% for Thailand, 32% for Indonesia among others). It could offer some advantage to India over its peers.