In March 2025, the Indian government introduced several policies with significant implications for the nation’s economy. A pivotal development was India’s decision to lower tariffs on electric vehicles (EVs) to facilitate a trade agreement with the United States. This move aims to resolve trade tensions and potentially attract foreign EV manufacturers like Tesla to the Indian market. However, domestic automakers have expressed concerns about increased competition, which could impact local EV production and market share . Concurrently, the U.S. imposed a universal 10% tariff on all imports, with India facing a 26% rate due to its high import duties on U.S. goods. Despite this, analysts suggest that India’s stock market may be more resilient compared to other Asian economies, given that exports to the U.S. constitute only 2% of India’s GDP. The estimated impact on GDP growth is relatively modest, between 0.3 to 0.5 percentage points . Additionally, the appointment of Poonam Gupta, a former economist at the World Bank and IMF, as the new deputy governor of India’s central bank, is expected to influence monetary policy, particularly in areas like inflation targeting and exchange rate management . These policy shifts reflect India’s strategic efforts to balance international trade relations, bolster economic resilience, and navigate the complexities of the global economic landscape.

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