India’s growth story may be headed for a rough patch after US President Donald Trump imposed a steep 25% “reciprocal” tariff on Indian goods, a recent report by Goldman Sachs showed.In a newly revised outlook, the brokerage trimmed its forecast for India’s real GDP growth by 0.1 percentage point. It now expects the economy to expand by 6.5% in calendar year 2025 and by 6.4% in 2026 which marks a 0.2 percentage point cut from earlier projections.“In our view, some of these tariffs are likely to be negotiated lower over time, and further downside risk to the growth trajectory mainly emanates from the uncertainty channel,” the report said, as quoted by ANI.However, even as growth is predicted to slow down, there’s a silver lining on the inflation front. The firm lowered India’s inflation projections by 0.2 percentage points for both calendar year 2025 and fiscal year 2026, now pegging it at 3.0% year-on-year. The easing prices are largely being driven by falling vegetable costs.The report also added a note of caution, the inflation forecast sits in “the left tail of India’s historical inflation distribution,” meaning such low levels are unusual and may not hold if unexpected economic shocks emerge.The uncertainty around trade has also raised broader concerns about investor confidence and planning. “Further downside risk to the growth trajectory mainly emanates from the uncertainty channel,” the report noted once again, pointing to the wider effects beyond just numbers on a chart.It also warned of two major risks that could prevent inflation from cooling further, a quick and smooth resolution of US-India trade negotiations, or a sharper-than-expected rise in core inflation, especially if it edges closer to the 4.0% mark.Meanwhile, the Reserve Bank of India (RBI) has chosen to hold its ground. In its policy announcement on Wednesday, the central bank kept the repo rate unchanged and maintained its own growth forecast of 6.5% for the current fiscal. Simultaneously, it also cut its CPI inflation projection for FY26 from 3.7% to 3.1%.As trade tensions simmer and inflation outlook improves, all eyes remain on how negotiations proceed between the two nations and whether India can map a steady path through the turbulence ahead.