New Delhi: Goldman Sachs has expressed a positive economic outlook for India following the trade agreement between the US and India. Under the deal, the US has reduced tariffs on Indian goods from 25% to 18%, effective immediately.
According to Goldman Sachs, this will bring India’s average tariff closer to the 15–19% range seen in other Asian countries. The report estimates that the lower tariffs could provide an additional 0.2% boost to India’s annual GDP, driven mainly by US demand for Indian exports (about 4% of GDP) and export elasticity.
The deal is also expected to improve investment sentiment. Reduced trade policy uncertainty is likely to encourage private investment. Goldman Sachs noted that improved private capital spending in the second half of 2026 could further support real GDP growth. As a result, the firm has raised its 2026 real GDP growth forecast by 20 basis points to 6.9% per year.
On the external front, the tariff reduction is expected to narrow India’s current account deficit to around 0.8% of GDP in 2026, down 0.25 percentage points. Additionally, easing trade tensions and improved capital flows could relieve some pressure on the rupee.