Goldman Sachs upgraded India's 2026 GDP growth forecast to 6.9% following the U.S.-India trade agreement. The Wall Street bank increased its projection by 20 basis points, citing lower tariffs that will boost India's export economy. The revised outlook reflects improved trade conditions between the two nations after President Trump announced reciprocal tariff reductions.

The U.S. cut tariffs on Indian exports from 25% to 18%, while eliminating duties on gems and jewelry and reducing textile tariffs. Goldman estimates the effective tariff rate on Indian imports dropped approximately 20 percentage points from previous levels. India reciprocated by reducing tariffs on U.S. industrial goods and agricultural products including dried distillers' grains, tree nuts, and various fruits.

The trade agreement includes India's commitment to purchase $500 billion of U.S. products over five years. Goldman lowered India's current account deficit estimate to 0.8% of GDP for 2026. The bank sees limited room for rupee gains and expects the RBI to maintain its policy repo rate at 5.25% as growth risks diminish with the improved trade outlook.

Quick Fact: Goldman upgraded India's 2026 GDP forecast to 6.9% year-on-year.