Due to concerns about US tariffs, S&P lowers its FY 26 growth prediction for India for the second time.

India's GDP prediction for 2025–2026 has been cut by 20 basis points to 6.3% by S&P Global Ratings, while for 2026–2027 it has been cut by 30 basis points to 6.5%.

The international rating agency had previously lowered India's growth forecasts for 2025–2026 from 6.7% to 6.5%.

Amid trade concerns following the US's announcement of reciprocal tariffs, the Reserve Bank of India has reduced its growth prediction for the current fiscal year 2025–2026 from 6.7% to 6.5%. In order to secure what he called "fair trade," President Donald Trump has reaffirmed his position on tariff reciprocity since taking office for a second term. He has emphasized that the United States will match tariffs imposed by other nations, including India. Since a number of nations have contacted the US administration in hopes of reaching a trade agreement, the tariffs have been suspended for ninety days.

In addition to India, the S&P today reduced growth forecasts for a number of other major nations, including the US, Canada, Europe, Germany, Italy, the UK, China, and Japan.

Over 2025–2026, the US GDP is predicted to expand by roughly 60 basis points (bps), whereas GDP growth in Canada and Mexico is predicted to decline by a comparable amount. In the major economies of Asia-Pacific, China's growth is expected to decline by 0.7 percentage points in 2025–2026, while Japan and India's growth is expected to decline by 0.2–0.4 percentage points.

In its Global Macro Update, S&P contended that "a seismic shift in US trade policy has added to the uncertainty that has roiled markets and raised the specter of a global economic slowdown."

S&P has revised its macro perspective to better grasp the possible impacts, which now includes predictions for GDP growth, inflation, and the likelihood of a recession. "The system centered on confidence and market prices has been shocked by the increase in US import tariffs, trading partner retaliation, ongoing concessions, and the ensuing market turbulence." "The real economy will undoubtedly follow, but to what extent?" Paul Gruenwald, Global Chief Economist at S&P Global Ratings, said.

All regions have a higher risk of the negative, but S&P does not expect a significant slowdown in growth.

"We do not foresee a US recession at this juncture," it stated.

A stronger-than-expected spillover from the tariff shock to the real economy is one of the risks to our baseline that is still firmly on the downside. Gruenwald added, "There is also less certainty on the longer-term structure of the global economy, especially the role of the United States. (ANI)