Independent market analyst Anand Tandon has cautioned that the recent surge in US tariffs on Indian exports could weigh heavily on India’s growth trajectory, especially if global demand weakens further. In a recent interview, Tandon expressed skepticism about the sustainability of India’s consumption-led recovery, citing inflationary pressures, uneven income distribution, and limited fiscal headroom as key concerns.
His remarks come amid heightened trade tensions following the US administration’s decision to double tariffs on a wide range of Indian goods, raising duties to as much as 50%. While India’s Q1 FY2025–26 GDP growth surprised on the upside at 7.8%, Tandon warned that headline numbers may not reflect underlying vulnerabilities in consumption and external trade.
🧭 Key Takeaways from Anand Tandon’s Market Outlook
| Indicator / Theme | Tandon’s Viewpoint | Implications for India |
|---|---|---|
| US Tariffs | Likely to settle between 15–20% on average | Export volumes may shrink |
| GDP Growth | Headline growth strong, but fragile underneath | Consumption and trade drag possible |
| Consumption Outlook | Bearish due to weak wage growth, inflation | Limited upside despite festive season |
| Sectoral Impact | Textiles may benefit, others face headwinds | Selective resilience, broad-based pressure |
| Policy Response | GST reform and rate cuts may offer relief | Execution speed critical |
Tandon emphasized that while India may negotiate better terms than some Southeast Asian peers, the overall impact of tariffs will be felt across sectors, especially those reliant on US demand.
🔍 Tariff Trends and Sectoral Exposure
According to Tandon, India is unlikely to see major relief from the US on tariff rates. He expects average duties to settle between 15% and 20%, higher than pre-April levels but lower than the threatened 50% ceiling. This could still dampen export competitiveness, particularly in price-sensitive categories.
| Sector | US Exposure ($ Billion) | Tariff Sensitivity | Outlook (Tandon’s View) |
|---|---|---|---|
| Textiles & Apparel | 12.5 | High | May gain if competitors face higher tariffs |
| Gems & Jewellery | 9.8 | Moderate | Volumes may shrink due to US slowdown |
| Engineering Goods | 8.2 | High | Pressure on margins and demand |
| Leather Products | 4.6 | Severe | Risk of losing market share |
| Pharmaceuticals | 6.1 | Low | Regulatory alignment key |
Tandon noted that sectors like textiles could benefit if US tariffs on Southeast Asian rivals remain higher, but overall export volumes may still decline due to weaker US GDP growth.
📉 Consumption Recovery: Why Tandon Remains Bearish
Despite recent optimism around India’s festive season and GST reforms, Tandon remains cautious on consumption. He argues that lower interest rates and tax relief may not translate into broad-based demand revival due to structural constraints.
| Consumption Driver | Current Status (Sept 2025) | Tandon’s Assessment |
|---|---|---|
| Rural Incomes | Stable but uneven | Limited trickle-down effect |
| Inflation | Moderating | Still a drag on discretionary spending |
| Interest Rates | Lower after June cut | May help, but not sufficient |
| GST Reform | Two-slab structure proposed | Positive, but impact will take time |
| Festive Season | Demand uptick expected | Short-lived, not structural |
Tandon believes that unless wage growth picks up and employment expands meaningfully, consumption will remain subdued beyond the festive quarter.
🔥 Policy Measures and Market Sentiment
India’s central bank cut interest rates by 50 basis points in June and may consider another cut later this year. The GST Council is also expected to finalize a two-slab structure (5% and 18%) to simplify compliance and boost spending. While these measures are welcome, Tandon stressed that execution and timing are critical.
| Policy Initiative | Status / Timeline | Market Impact (Expected) |
|---|---|---|
| GST Slab Rationalization | Under discussion | Could boost consumption by Diwali |
| RBI Rate Cuts | One cut done, one expected | Liquidity support, but limited demand push |
| Export Promotion Schemes | Awaiting rollout | Relief for exporters, sectoral support |
| Fiscal Stimulus | Limited headroom | Constrained by deficit targets |
Tandon also warned that global macro conditions—especially US consumer spending and geopolitical risks—will influence India’s growth outlook more than domestic reforms alone.
🧠 Expert Commentary and Broader Perspectives
| Expert Name | Role | Comment |
|---|---|---|
| Meera Iyer | Macro Economist | “Tandon’s caution is warranted—growth must be inclusive.” |
| Rajiv Bansal | Trade Strategist | “Tariffs are a real threat to India’s export engine.” |
| Dr. Rakesh Sinha | Consumption Analyst | “Without wage growth, rate cuts won’t revive demand.” |
Market analysts broadly agree that while India’s macro indicators look strong, the underlying consumption story remains fragile.
📌 Conclusion
Anand Tandon’s bearish stance on consumption and caution over tariff implications offer a sobering counterpoint to India’s upbeat GDP numbers. As policymakers push reforms and exporters seek relief, the real test will be in sustaining growth across sectors and income groups. With global headwinds mounting and domestic demand still uneven, India’s economic resilience will depend on how well it balances reform, relief, and recovery.
—
Disclaimer: This article is based on publicly available expert commentary and media reports as of September 4, 2025. It is intended for informational purposes only and does not constitute financial, investment, or policy advice.
