TNI Bureau: Despite the new 50% Trump tariffs on Indian exports, global consultancy EY has said India is likely to become the world’s second largest economy by 2038 in purchasing power parity terms with a GDP of 34.2 trillion dollars. The August 2025 issue of EY Economy Watch stated that India continues to show strong economic fundamentals even after the US imposed 50 percent tariffs, the highest on any Asian country.

The report highlights that India benefits from a young population with a median age of 28.8 years high savings and investment rates and a sustainable fiscal position. Government debt is projected to decline from 81.3 percent of GDP in 2024 to 75.8 percent by 2030.

EY noted that reforms such as GST and UPI along with public investment in infrastructure and new technologies will strengthen long term growth. The consultancy estimated that tariffs may affect 0.9 percent of GDP but growth impact could remain limited to 0.1 percentage points with timely policy steps.