Goldman Sachs Revises India’s GDP Growth Forecast Down to 6.5% for CY25 Amid US Tariff Imposition.
Economy Business
In August 2025, Goldman Sachs Group, Inc. lowered India’s real Gross Domestic Product (GDP) growth projections to 6.5% for Calendar Year 2025 (CY25) and 6.4% for CY26. This revision follows renewed trade tensions after the United States imposed a 25% reciprocal tariff on Indian imports effective from August 1, 2025.
- Goldman Sachs revised India’s GDP growth estimate for CY25 downward by 0.1 percentage points from 6.6% to 6.5%, and for CY26, it was lowered by 0.2 percentage points to 6.4% from 6.6%. This downward revision reflects the economic impact anticipated from the increased trade barriers following the US tariff.
- Alongside GDP, the global financial services firm also adjusted its inflation outlook. Headline inflation for both CY25 and Financial Year 2025-26 (FY26) was forecast at 3.0%, marking a decrease of 0.2 percentage points compared to previous estimates. This suggests a relatively benign inflation environment despite the trade tensions.
Main Point :- (i) The Current Account Deficit (CAD), a key external sector indicator, was raised to 0.9% of GDP for both CY25 and CY26. The increase in CAD reflects the expected impact of trade disruptions and tariff barriers affecting India’s external balances.
(ii) In a related development, the Reserve Bank of India (RBI) on July 30, 2025, maintained the repo rate without any change and retained its GDP growth forecast for FY26 at 6.5%. However, it lowered the Consumer Price Index (CPI) inflation estimate from 3.7% to 3.1%, aligning partly with Goldman Sachs’ view on easing inflation pressures.
(iii) This revision by Goldman Sachs underscores the challenges India faces in sustaining high economic growth amid global trade uncertainties, while inflation and monetary policy outlooks remain relatively stable in the near term. The focus remains on navigating the trade tensions and their ripple effects on exports and macroeconomic stability.
About Goldman Sachs Group, Inc.
Chairman & CEO : David Michael Solomon
Headquarters : New York, United States of America (USA)
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