India’s Chief Economic Adviser, V. Anantha Nageswaran, shared an optimistic forecast on Thursday, September 18, 2025, anticipating a resolution to the prevailing tariff disputes with the United States within the next eight to ten weeks.
These discussions are crucial, especially given the U.S. imposed an additional 25% tariff on Indian goods in August due to India’s continued procurement of Russian oil. This hiked the total tariff burden on New Delhi to a significant 50%.
This situation has been closely observed, as previously highlighted in analyses concerning India’s August trade data and the specific impact of U.S. tariffs.
During an engaging session hosted by the Bharat Chamber of Commerce in Kolkata, Mr. Nageswaran revealed that ‘underneath the surface, conversations are actively progressing between the two governments.’ He expressed a strong intuition: ‘My hunch is that in the next eight to ten weeks, we will likely see a solution to the tariffs imposed by the U.S. on Indian goods.’
He also cautioned that a prolonged continuation of these tariffs would inevitably lead to a decline in India’s exports to the U.S.
Describing India as an aspiring lower-middle-income economy, Mr. Nageswaran proudly noted that the nation achieved a robust real Gross Domestic Product (GDP) growth of 7.8% in the first quarter of the current financial year.
A Closer Look at India’s Economic Growth Trajectory
He projected that significant contributions from manufacturing, services, and agriculture sectors would fuel substantial economic progress over the next two years. Furthermore, he emphasized that sustained consumption and investments would remain key pillars supporting the country’s growth.
Mr. Nageswaran highlighted India’s favorable debt-to-GDP ratio, noting that the country’s efficiency in capital utilization is evident as it generates more GDP per USD of debt compared to many other nations.
He further observed that rural demand continues to show remarkable resilience, while urban demand is steadily gathering momentum.
According to the CEA, recent adjustments in GST rates are expected to boost consumers’ disposable income, thereby stimulating increased urban consumption.
This aligns with previous reports indicating that Q1 GDP growth reached a five-quarter high of 7.8%, driven by widespread strength across various sectors.
The CEA pointed out a growing trend in credit extended to the MSME (Micro, Small, and Medium Enterprises) sector, contrasting with a structural shift in advances to large industries. He added that the current economic landscape offers abundant opportunities for resource mobilization.
Despite global challenges, Mr. Nageswaran affirmed the resilience of India’s external economic sector. He stated that ‘trade continues to be robust in the current financial year’ and highlighted the country’s healthy foreign exchange reserves.
He noted that the current account deficit remains manageable, having narrowed significantly to just 0.2% of GDP in the first quarter of the 2025-26 fiscal year. Addressing the rupee’s depreciation against the U.S. dollar, the CEA expressed confidence, stating, ‘Given the underlying strength of the economy, I am more inclined to believe that in the longer run, the rupee is likely to hold its value and become stronger.’
Outlining the government’s key policy priorities, Mr. Nageswaran underscored a sustained focus on government capital expenditure, strategic incentives to stimulate private investment, and comprehensive systemic deregulation. He also mentioned that the expansion of crucial physical infrastructure, such as ports and airports, is designed to ensure that economic growth occurs without ‘overheating the economy.’
Regarding India’s trade relationship with China, the CEA observed that imports primarily consist of capital and intermediate goods. He urged the Indian private sector to step up its efforts in innovation and significantly boost spending on Research and Development (R&D).
Finally, addressing the burgeoning influence of artificial intelligence (AI), Mr. Nageswaran stated that its impact has been marginal to date. He acknowledged that ‘coding-level jobs will be under threat,’ but assured that this isn’t necessarily a negative from an overall employment perspective, emphasizing the critical need for individuals to ‘upskill themselves’ to adapt to the evolving job market.