August 5, 2025

US President Donald Trump is ramping up his tariff threats against India, primarily due to India's dealings with Russia and oil purchases. Trump has announced a sweeping 25% tariff on Indian goods, coupled with penalties linked to Russian military equipment purchases. This has exacerbated the already tense trade relations between the two nations. Despite these threats, India has not retaliated with its own tariffs and stands firm against what it sees as hypocrisy from the US and EU. While there are risks to India's economy from Trump's tariff escalation, the nation is witnessing a surge in new business registrations. According to recent data from the corporate affairs ministry, 17,555 companies were registered in July alone, marking an 18% increase compared to the previous year. Limited liability partnerships (LLPs) also saw significant growth, increasing by 25%. Over four months, new businesses surged by over 26%. This trend indicates a robust entrepreneurial spirit in India, which is maintaining its stature as the world's fastest-growing major economy. Economists projected a GDP growth of 6.4% for FY26 and FY27, driven by strong domestic demand despite potential setbacks from US tariffs. In mid-2025, India's economy appears to be resilient, with inflation under control and growth forecasts remaining steady, thanks to supportive fiscal and monetary policies. Reports indicate that core inflation is subdued, providing the Reserve Bank of India (RBI) room for further rate cuts. Global executives from major companies are optimistic about India’s market, noting a revival in demand after a period of slowing sales due to geopolitical tensions and economic uncertainties. CEOs from industry giants such as Apple, Coca-Cola, and Unilever have emphasized India's potential as a key growth market, reiterating their commitment amid the economic landscape. As rural consumption is projected to rise due to better crop outcomes and social spending, urban consumption is also stabilizing. The Confederation of Indian Industry (CII) reveals that private capital expenditure continues steadily across industries, countering perceptions of a slowdown. Despite external risks, India's fundamental economic structure and consumer market dynamics continue to attract new businesses and investments, showcasing resilience against tariff threats.

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Tags: Tariffs, India, Trump, Economy, Business growth,