Despite forecasts of slowing growth, India’s economy unexpectedly strengthened in the April–June quarter, as sharp increases in US tariffs threatened to dampen economic activity in the upcoming months. In a move that analysts warn could harm exports of textiles, leather products, and chemicals, the US increased its duties on Indian imports on Wednesday to as high as 50%, the highest rate among US trade partners, alongside Brazil.
The gross domestic product of Asia’s third-largest economy grew 7.8% in the most recent quarter, following a 7.4% increase in the preceding three months, according to official statistics released on Friday. This was far higher than the 6.7% growth predicted by analysts in a Reuters poll.
In the three months ending in June, the gross value added (GVA), which is considered a more accurate indicator of underlying economic activity, increased 7.6% compared to 6.8% in the preceding quarter. Indirect taxes and government subsidy payments, which are frequently erratic, are not included in GVA. Despite an increasingly uncertain export picture, India’s economy is still one of the major economies with the quickest rate of growth at the current rate. The administration of Prime Minister Narendra Modi has promised to assist industries affected by US tariffs and has stated that it will provide tax breaks to increase local demand.
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