The BRICS TimesEconomic Affairs Secretary highlighted that the government has implemented certain initiatives and plans more measures to boost domestic demand, which could also help manufacturing units affected by the U.S. tariffs.
The government is actively devising an action plan to address the impact of a steep 50% tariff imposed by the U.S. on Indian exports, Economic Affairs Secretary Anuradha Thakur stated.
“There are several employment-intensive sectors exposed to the U.S. market, which may face challenges. The government is aware and is evaluating the potential impact while exploring solutions,” she told PTI.
In addition, Thakur noted that some steps have already been taken to stimulate domestic demand, and more measures are expected, which could provide relief to manufacturing units affected by U.S. tariffs.
The government’s Budget included a zero income tax slab for earnings up to ₹12 lakh under the new tax regime, offering significant savings for taxpayers. Planned GST reforms, including rate rationalisation, are expected to reduce the prices of several goods. A better-than-expected monsoon is also likely to boost agricultural output, further enhancing rural demand.
Thakur expressed confidence that the government remains on track to meet the fiscal deficit target of 4.4% of GDP for 2025-26, despite temporary discrepancies in recent monthly figures. The fiscal deficit at the end of July reached 29.9% of the full-year target, compared with 17.2% in the same period last year.
“Monthly or quarterly fiscal deficit figures may not fully reflect the broader trend due to timing differences in receipts and expenditures. Our overall assessment suggests the target will be met,” she said. The government estimates the fiscal deficit for 2025-26 at ₹15.69 lakh crore.
Thakur highlighted that the economy’s fundamentals remain strong, noting positive private consumption figures and robust gross capital formation, with both public and private investment expected to stay firm in the coming months. “Government capex has significantly supported growth, contributing to both fiscal and GDP performance,” she added.
Commenting on the April-June GDP growth of 7.8%, Thakur said it demonstrates the broad-based nature of economic expansion. The growth was driven by strong performance in agriculture, manufacturing, construction, and services, reflecting the economy’s resilience and solid macroeconomic fundamentals.
India remains the fastest-growing major economy, outpacing China, whose GDP grew 5.2% in the same period.
