US President Trump’s “reciprocal tariffs” could disrupt global trade, with India potentially facing tariffs. However, India’s lower export dependence suggests the impact could be limited. India and the U.S. are also currently negotiating a bilateral trade agreement, which may shorten the duration of any potential tariffs. Domestically, Q3-FY25 has shown signs of moderate recovery, with India’s real GDP projected at 6.2% for Q3 and 6.1% for FY25. To support economic recovery, fiscal and monetary policymakers are stepping in to support demand, announcing income tax cuts in the FY26 budget, and a 25-bps repo rate cut respectively. These should support a pickup in growth to 6.4% in FY26. On the monetary policy front, we expect another 25-bps rate cut in April, given that inflation is now aligning at around the 4% level, though U.S. trade risks remain.