S&P Global Ratings has revised down India’s GDP growth forecast for the 2025-26 fiscal year, citing uncertainties tied to trade tensions and reciprocal tariffs announced by the United States. The global rating agency reduced India’s growth projection by 20 basis points to 6.3 percent, while also cutting the 2026-27 estimate by 30 basis points to 6.5 percent. This follows a previous reduction from 6.7 percent to 6.5 percent for the 2025-26 period.
The cut mirrors similar adjustments made by the Reserve Bank of India (RBI), which lowered its own growth forecast to 6.5 percent from 6.7 percent. Both revisions highlight the growing concerns over the economic impact of trade disruptions, particularly in the wake of US tariffs. President Donald Trump, in his second term, has consistently advocated for tariff reciprocity, prompting fears of escalating trade tensions between the two nations.
The ongoing tariff standoff between the US and several other countries, including India, has caused significant volatility in the global market. In response to these concerns, President Donald Trump’s administration delayed the imposition of tariffs for 90 days, allowing countries like India to negotiate potential trade agreements. However, the underlying uncertainty has weighed heavily on global economic forecasts.
S&P also revised growth projections for several major economies. The US is expected to see its GDP growth fall by 60 basis points in 2025-2026, while other large economies such as the UK, China, and Canada also face downgrades. The global economic slowdown, largely attributed to trade-related uncertainties, has sparked concerns about a potential recession.
S&P’s report underscores the far-reaching effects of trade policy shifts, noting the risks to global economic stability. However, the agency does not foresee an immediate recession in the US, despite the substantial risks posed by the tariff disruptions.
The global outlook remains volatile, with concerns over the long-term impacts of trade tensions on economic growth and market confidence.
