Sun Aug 31 07:10:01 UTC 2025: **Summary:**
The Indian government is formulating a plan to address the impact of a significant 50% tariff hike imposed by the U.S. on Indian exports. Economic Affairs Secretary Anuradha Thakur assures that the government is aware of the potential impact on employment-heavy sectors and is working on solutions. The government is also taking steps to stimulate domestic demand through tax reforms, GST rationalization, and anticipating a boost from a good monsoon. Despite temporary mismatches in monthly numbers, Thakur is confident that the fiscal deficit target of 4.4% will be met. She highlights the strong fundamentals of the Indian economy, citing positive movement in private consumption, strong public and private capital expenditure, and robust GDP growth of 7.8% in the June quarter, driven by manufacturing, construction, services, and agriculture. India remains the fastest-growing major economy, outpacing China.
**News Article:**
**India Prepares to Counter U.S. Tariff Hike, Remains Confident in Economic Growth**
**New Delhi, August 31, 2025** – The Indian government is actively developing an action plan to mitigate the potential economic impact of a newly imposed 50% tariff hike by the United States on Indian exports, according to Economic Affairs Secretary Anuradha Thakur. Speaking to PTI in an interview, Thakur acknowledged the potential effects on employment-heavy sectors and assured that the government is closely monitoring the situation and devising solutions.
“There are certain employment-heavy sectors which do have exposure to the U.S. and to that extent may get affected. The government is well aware of that and is assessing the possible impact and working towards possible solutions,” Thakur stated.
In addition to addressing the tariff concerns, the government is focused on bolstering domestic demand. Measures already implemented include zero income tax for income up to ₹12 lakh under the new tax regime and planned GST reforms aimed at rationalizing rates and lowering commodity prices. A positive monsoon season is also expected to boost agricultural production and rural demand.
Thakur also expressed confidence in meeting the fiscal deficit target of 4.4% for the current financial year, despite recent concerns raised by temporary fluctuations in monthly figures. “Quarter-by-quarter or month-by-month assessments of fiscal deficit numbers may not give a correct picture because of temporal mismatches, which may come in on the receipt and expenditure side,” she explained.
The Economic Affairs Secretary emphasized the strength of the Indian economy’s fundamentals, citing positive trends in private consumption, strong public and private capital expenditure, and a robust GDP growth of 7.8% in the first quarter of the fiscal year. This growth, she noted, was driven by strong performance in manufacturing, construction, services, and agriculture.
India remains the fastest-growing major economy, surpassing China’s 5.2% GDP growth in the same period. “Q1 numbers reflect the basic resilience of our economy. It reflects strengthening of the momentum in the economy and it is anchored in strong macroeconomic fundamentals,” Thakur concluded. The government believes that the factors contributing to this strong performance will continue to support growth in the coming quarters.
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