Domestic Demand to Offset Impact of U.S. Tariffs, India’s GDP Growth Expected to Continue

Despite global uncertainties and recent U.S. tariffs on certain Indian exports, experts believe that India’s economic growth will remain robust. Strong domestic demand is expected to balance out the potential export losses, ensuring continued GDP expansion.

 

Resilient Growth Drivers

Economists highlight that India’s growth story is being supported by rising rural incomes, expanding consumption capacity, and strong investment flows. With rural households accounting for nearly two-thirds of total demand, their rising purchasing power is projected to sustain momentum in the economy.

India’s economic expansion is expected to remain above 6% over the medium term, supported by structural reforms, infrastructure investments, and a favorable demographic profile.

 

Expert Views

• Jyoti Vij, FICCI: India’s high-growth trajectory will continue due to its strong domestic market and diversified demand base. Even if exports face temporary headwinds, rising consumer spending on goods and services will fuel economic activity.
• Anand Mahindra, Industry Leader: The economy has matured to withstand global trade disruptions. The focus should now shift to improving competitiveness, enhancing production capabilities, and maintaining policy stability to ensure long-term growth.

 

Impact on Industry and Public Confidence

Analysts from NITI Aayog and industry bodies point out that sectors like textiles, auto components, and engineering goods may face short-term challenges due to higher U.S. tariffs. However, these will likely be offset by increased consumption within the domestic market and trade diversification with other regions.

 

The reforms-led environment has also boosted confidence among businesses and ordinary citizens. A stable policy framework, combined with self-reliance measures, is expected to enhance resilience against global shocks.

 

Outlook

India is positioning itself as one of the few large economies capable of sustaining long-term high growth. With household incomes rising and rural consumption strengthening, the domestic economy is expected to remain a strong pillar of support, ensuring GDP growth continues steadily despite external challenges.