Lower tariffs under the newly announced India–US trade agreement could provide a meaningful lift to India’s economic growth outlook, Chief Economic Adviser (CEA) V. Anantha Nageswaran said on Tuesday. Speaking to NDTV Profit, Nageswaran noted that reduced trade barriers from the United States would improve growth sentiment and support stronger capital inflows, potentially nudging economic outcomes closer to the upper end of official projections.

Under the agreement, reciprocal tariffs on Indian goods exported to the United States will be lowered to 18% from 25%, while an additional 25% duty linked to India’s purchases of Russian crude oil will be withdrawn. US President Donald Trump announced that the deal would take effect immediately following a phone conversation with Prime Minister Narendra Modi, marking a breakthrough after months of stalled negotiations.

Nageswaran’s comments come against the backdrop of the Economic Survey, which has projected India’s real GDP growth for FY27 in the range of 6.8% to 7.2%. He clarified that the growth forecast was framed independently of the India–US trade agreement, with tariff uncertainty already factored into the baseline estimates. However, he acknowledged that the deal provides upside to the outlook rather than forming its foundation.

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Speaking at a press conference after the Economic Survey’s release on January 29, Nageswaran said the government’s medium-term growth assumption of around 7% rests on domestic reforms, financial system stability, and India’s evolving trade strategy. While the agreement was not a core assumption, he said its successful conclusion adds comfort to the projections by strengthening confidence at a time of global economic uncertainty.

Nageswaran also cautioned that global volatility remains a key headwind. He attributed recent market turbulence to the unwinding of a decade of ultra-loose global monetary policy, which had fuelled credit expansion and elevated asset prices worldwide. This adjustment, he said, continues to pressure emerging market currencies and capital flows, including those in India.

Beyond trade, the CEA highlighted ongoing deregulation efforts in sectors such as insurance and nuclear energy as crucial for long-term growth. According to him, these reforms aim to improve policy clarity, attract foreign direct investment, and reinforce India’s growth trajectory beyond short-term developments linked to global trade agreements.

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