The Congress party has sharply criticized the government’s celebration of the 7.8% GDP growth for the April-June 2025 quarter, labeling it as “irrational exuberance” that masks underlying economic weaknesses and fails to account for the looming impact of U.S. tariffs imposed by President Donald Trump. Congress general secretary Jairam Ramesh, in a scathing post on X, argued that the robust headline figure, the fastest growth in five quarters, is misleading and inflated by temporary factors.

Ramesh highlighted that the GDP surge, driven by strong performances in agriculture and services like trade, hotels, finance, and real estate, was boosted by exporters rushing to ship goods to the U.S. to evade impending tariffs. “The front-loading of exports artificially inflated export growth and the headline GDP number,” he said, warning that the true consequences of the “Trump tariff shock” will hit in the second quarter, potentially derailing key export sectors like textiles, leather, and chemicals.

The Congress leader pointed out several contradictions in the data, noting that urban consumption remains weak and rural consumption faces structural constraints. He also flagged a slowdown in nominal GDP growth, which includes inflation, dropping to 8.8% from an average of 11% over the previous eight quarters, signaling potential pressure on corporate profits. Additionally, Ramesh questioned a mysterious 1.8 percentage point discrepancy in GDP growth not explained by consumption, investment, or trade, calling for greater transparency from the government.

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Manufacturing sales growth, as opposed to profits, has continued to decelerate, Ramesh noted, further challenging the narrative of robust economic health. “The GDP numbers present contradictions that cannot be brushed aside,” he stated, citing a respected bank report that aligns with Congress’ concerns about the sustainability of the growth trajectory.

As India braces for the impact of U.S. tariffs, which doubled to 50% on Indian goods due to India’s continued imports of Russian oil, economists warn of a potential 0.6-0.8 percentage point reduction in GDP growth. With the rupee hitting a record low of 88.30 and job losses looming, Congress is urging the government to address these vulnerabilities and prepare for the economic turbulence ahead.

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