# India’s Surprising Growth Amid Tariff Pressures Raises Questions

- Link: https://www.thailand-business-news.com/india/262811-indias-surprising-growth-amid-tariff-pressures-raises-questions
- Published: 2025-12-03T14:27:29+07:00
- Author: Akanksha Singh

**BANGKOK, Dec. 3, 2025** — India’s economy posted an unexpected surge in growth
in the July–September quarter, defying heavy U.S. tariffs and sparking debate among
economists about the accuracy of official data.

### Growth Numbers Defy Expectations

India’s gross domestic product expanded **8.2%** in the third quarter, up from **
7.8%** in the previous period. The figure beat forecasts of **7.3%** from a Reuters
poll, surprising analysts who had expected tariffs to weigh more heavily on exports.
The trade deficit nonetheless widened by nearly **1 trillion rupees ($11 billion)**
year-on-year.

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### Economists Question Data Reliability

Analysts warn that the headline numbers may be inflated due to calculation quirks.
HSBC economists noted that manufacturing output was not properly deflated during
a period of falling commodity prices, while the service sector deflator contained
too many manufacturing elements. These distortions may have exaggerated real growth.
Other indicators — such as record-low inflation at **0.25% in October**, muted bond
yields, and weak credit growth — suggest the economy may not be as overheated as
GDP figures imply.

### Domestic Demand Provides Cushion

Despite concerns, corrected estimates still point to growth around **7%**. Supportive
factors include:

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 * **Consumption tax reforms** ahead of the festive season, boosting household spending.
 * A **strong monsoon** and low inflation, sustaining rural demand.
 * **Labor reforms** that could strengthen long-term productivity.

### Strategic Implications

India’s resilience has geopolitical consequences. The country may feel less pressure
to scale back purchases of Russian crude oil, a key factor behind Washington’s tariff
stance. Stronger growth could also embolden New Delhi in trade talks with the U.
S., particularly on sensitive agricultural issues.