Trump Tariff Impact / Trump's tariff attacks will be ineffective- India's 4 'armours' will withstand all attacks

Trump Tariff Impact: Donald Trump's historic speech in the US Parliament has upset all the heads of state in the world. China even retaliated by increasing tariffs on American goods. If we talk about India, the effect of Trump's reciprocal tariff will be seen. It is estimated that Trump's tariff can cause an annual loss of 0.60 percent to India's growth and about Rs 62 thousand crore to exports. But every attack of Trump can go in vain. The reason for this is India's four strong shields, which will protect the country's economy and GDP. India started working on preparing these shields after 2023 and now they have become so strong that they are ready to face any economic weapon. Let us know the three main shields of India that can save the country's economy.

Crisil Intelligence Report

Crisil Intelligence has recently released a report in which these three shields have been mentioned. According to the report, despite trade-related tensions arising from geopolitical and US tariff actions, India's real GDP growth is projected to remain stable at 6.5% in FY26. According to the report, India has four key shields to boost the country's growth and protect it from the uncertainty arising from Trump tariffs:

• Low inflation - Tax benefits announced in the Union Budget for FY2025-2026 will provide relief to consumers.
• Low interest rates - Possible rate cuts by the Reserve Bank of India will boost economic growth.
• Government capital expenditure (capex) - Government investment will boost infrastructure and industrial development.
• Exports and domestic demand - Strong services trade balance and stable remittance flows will strengthen the economy.

Manufacturing sector growth

According to the report, the manufacturing sector, one of the key engine drivers of growth, is expected to grow at an average of 9 per cent annually from FY25 to FY31. Whereas before the pandemic, this rate was 6 per cent. The share of manufacturing in India's GDP is estimated to grow to around 20 per cent by FY25. Despite the strengthening of manufacturing, the services sector will remain the main driver of economic expansion, although its growth rate may slow down.

Reduction in inflation and interest rates

Inflation pressures are expected to remain low. Food inflation has also softened after non-food inflation declined in FY25, and further improvement is expected in FY26. This softening is paving the way for a possible rate cut by the Reserve Bank of India. Crisil has predicted a reduction in policy rates by 50-75 basis points in the next financial year.

Tax relief and economic growth

Corporate sector revenue growth is expected to be 7-8 per cent in FY26, up from around 6 per cent in FY25. This growth will be primarily volume-driven, with the consumption sector leading the way. Tax cuts announced in the Union Budget will boost personal consumption, which accounts for over 55 per cent of India's GDP.

Conclusion

Although the US tariff war could pose a challenge for India, India has strong economic defence mechanisms to handle it. Low inflation, low interest rates, government investment, and growing domestic demand will provide strength to India's economy. India's policy and economic resilience will help it overcome this global crisis.