India's Economy Shows Resilience Amid Global Trade Tensions

India's economy is projected to remain robust despite U.S. tariff threats. S&P Global's report emphasizes India's service export strength, predicting modest GDP revisions and stable growth, supported by domestic demand and favorable fiscal factors.

India's economy is poised to maintain its stability despite escalating trade tensions triggered by U.S. President Donald Trump's tariff threats, as per a report by S&P Global. The analysis suggests that countries like India and the Philippines, which have a notable portion of service exports, will experience minimal disruption from tariffs mainly targeting goods.

The report elaborates that tariffs predominantly affect goods, making service-oriented economies more resilient to trade fluctuations. It also underscores that while U.S.-led trade tensions will have some impact across Asia-Pacific, India's domestic demand is expected to stay robust, signaling only minor GDP forecast adjustments.

Furthermore, the report highlights stable economic growth in the Asia-Pacific region through late 2024, with India's anticipated GDP growth rate at 6.5% for the fiscal year ending March 31, 2026. Contributing factors to India's growth include reduced food inflation, tax benefits, and lower borrowing costs, which are set to bolster consumer spending and mitigate external trade pressures.

(With inputs from agencies.)