MUMBAI: India’s economy expanded a little over 6 percent in the December quarter, official data showed Friday, marking an uptick from the previous quarter as the country prepares for the fallout of US President Donald Trump’s protectionist trade policies. The figures—an increase from the July-September period—will likely be welcomed by policymakers in the world’s fifth-largest economy, which has been grappling with unexpectedly sluggish growth in the face of potential US tariffs. Data from India’s statistics ministry showed that gross domestic product grew 6.2 percent in the three months to December, when compared to the same period last year, largely matching analyst expectations. The reading also comes well above the revised 5.6 percent year-on-year growth recorded in the previous quarter.

India also slightly revised upwards its growth projection for the fiscal year through March 2025 to 6.5 percent, from an earlier forecast of 6.4 percent. Chief economic adviser V Anantha Nageswaran told a press briefing that the latest projections reaffirmed that India’s growth rate “continues to stand out among peer groups both in advanced and developing economies”. But the December quarter’s growth remains below the 8 percent pace that experts say India needs to create enough well-paying jobs and generate economic prosperity. Analysts say the road ahead may be tough.

“To achieve the 6.5 percent growth target for this fiscal year, we will need to see a little over 7 percent-plus growth in the March quarter,” Teresa John of Nirmal Bang Institutional Equities told AFP.

“To me, this doesn’t seem easily achievable and appears to be a pretty high ask rate,” she said. Muted urban consumption and lower government spending have taken a toll on economic activity over the last few quarters. The slowdown prompted the government to deliver $12 billion in income tax cuts and the central bank to cut interest rates for the first time in nearly five years. “The economy is still fairly soft by India’s recent standards,” Harry Chambers of Capital Economics said, but with “policy now decisively turning more supportive, economic growth should pick up further over the coming quarters”.

Adding to India’s woes are the pressures of navigating the impact of US tariffs that may be imposed by the Trump administration. Analysts at Nomura have flagged that India’s relatively higher tariff rates and its trade surplus with the United States place it at risk of reciprocal tariffs.

While details regarding Trump’s ‘eye-for-eye’ tariff plans are still unclear, estimates by SBI Research suggest India’s gross domestic product could see a 50 basis point hit if the United States slapped a 20 percent flat tariff on the country’s exports. New Delhi has been quick to respond so far, preemptively cutting tariffs on products including high-end motorcycles and bourbon whisky. Indian Prime Minister Narendra Modi’s visit to the United States this month saw both countries announce plans to negotiate the “first tranche” of a trade agreement by autumn this year. – AFP