The Chief Economic Advisor (CEA) Anantha Nageswaren said on Saturday that the Indian government, along with various parties involved, is “working overtime” to pushed the effects of another 25% of the tariff deposited by the United States on Indian exports, which brings a total obligation to 50%.
Based on an event organized by the Indian Chamber of Commerce, he mentioned that this unexpected development, which came into force on August 27, has triggered immediate discussions in the last three to four days and included export bodies, the private sector promotion agencies and the relevant ministries.
The Ministry of Finance and other ministries formulates a strategy that provides the affected sectors “time cushion” and “financial cushion” so that the “weather of contemporary storms and also will appear stronger”, “Ptireported.
Catalyst for action
Nageswarean sees a crisis as an opportunity for action. He said that minor or main crises often act as catalysts that provide focus and purpose for all industries of society, including the government, private sector and households to take the necessary steps that could otherwise be delayed.
He also urged the private sector to use this situation to diversify his export destinations, respond to the changing consumers’ preferences, invested in the innovation and research and development of products, and to improve business practices to increase competitiveness.
Measures that can alleviate the impact
In order to face the potential negative impact of Trump tariffs, the government takes several measures to stimulate domestic demand and support employment.
- Tax relief: In February, a “huge reduction in tax” for medium and medium and medium -revenue households, which is expected to increase the disposable household income, which will lead to greater domestic demand.
- GST rationalization: A further relief is expected to increase consumption through GST rationalization, reducing the number of plates and simplifying processes for which they are expected to be discussed at the upcoming GST Council meeting.
- Trade diversification: India actively monitors trade diversification through free trade agreements such as SAE and the United Kingdom, and ongoing discussions with Oman and Bahrain, some of whom could take place before the end of the year and therefore provided relief to exporters who lost their competitive advantage in the US.
Silver lining in economy
Nageswaren expressed hope that tariffs would be “short -term” and that “understanding the importance of greater dimensions of the relationship in India and the US will eventually win.” He also emphasized several “silver lining”, which point to a robust and improving economic environment.
- Strong production: The gross added value of the sector (GVA) increased by 10.1%in nominal expression and in real terms of 7.7%, indicating its strength and providing hope that year -round Nominal GDP growth remains near 10.1%, as expected in the Union budget.
- Fiscal caution and credit rating: Indian fiscal deficit has decreased significantly, leading to a rating on a standard and Poor’s loan. This reduced the costs of government loans and reduced capital costs for the private sector.
Loss of work due to US tariffs
When Nageswaren was asked to lose job losses due to US tariffs to Indian goods, he said that any loss of employment, if they occur, would be limited to those export companies that are highly exposed to the US market, nor reported.
“Some of them will be able to find alternative markets, and some of them may also decide to take a moderately long -term view that if the continuing uncertainties related to tariffs are contained and temporary, they may decide to look for it, and not necessarily let go of their workers,” he said.
“… from higher domestic demand could be compensated. We had a very good monsoon season. Agricultural rural demand will grow.
(Tagstotranslate) Main economic advisor
