India's Manufacturing Ambitions Face Headwinds From 50% US Tariffs, Says WEF Report

The 50% tariffs imposed by US President Donald Trump could weigh on India's manufacturing ambitions, according to the World Economic Forum's latest Chief Economists' Outlook.

"India’s growth for 2025 is projected by the IMF at 6.4%, but its manufacturing ambitions face headwinds from newly announced US tariffs of 50% on exports, a development that weighs heavily on the regional outlook," the WEF report said.

The WEF outlook, meanwhile, noted that India has emerged as the "fastest-growing major economy". It also mentioned that New Delhi is committed to 4.4% budget deficit target and has recently introduced changes in the goods and services tax regime.

On tariffs, the report notes that they are not just a concern for India but for countries across the globe. Considering the global uncertainty, WEF said that the global economy will remain subdued as it underwent a period of profound transformation marked by short-term disruptions.

The economists have called the trade disruptions at a 'very high' level. These disruption have extended beyond trade and have impacted global value chains, financial markets and broader economic institutions that has created a bubble of uncertainty.

The report further added that 72% of surveyed chief economists expect the global growth to be weakened over the next year. Trade disruptions, rising policy uncertainty and rapid technological advancement are few of the reasons that are currently impacting the economic environment.

The report also showed the diverging growth expectations across regions. While emerging markets, particularly west Asia and North Africa, South Africa and East Asia are the key drivers, advanced economies are projected to see stagnations. Europe and US are anticipated to see weak growth with inflationary challenges.

The outlook for China remains mixed with 56% economists seeing moderate growth amid persistent deflationary pressures.