India is not anywhere near as dependent on final US demand as many other EMs are but a total tariff of 50% would be large enough to have a material impact on GDP growth. If it sticks, the resulting drop in exports to the US could reduce GDP growth by 0.8%-pts both this year and next. Meanwhile, headline inflation has come in weaker than expected over recent months. Combined with the tariff threat, this has increased the chances of the Reserve Bank of India resuming its monetary easing cycle this year.
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