CEA V Anantha Nageswaran predicts Donald Trump's tariff's impact on Indian economy
&imwidth=600&imheight=450&format=webp&quality=medium "CEA V Anantha Nageswaran predicts Donald Trump's tariff's impact on Indian economy")
Chief Economic Advisor (CEA) V Anantha Nageswaran Photograph: (ANI file)
Donald Trump has imposed a 50 per cent tariff on Indian exports because New Delhi has been buying Russian oil and weapons. CEA V Anantha Nageswaran said that the impact of the tariffs could grow.
Chief Economic Advisor (CEA) V Anantha Nageswaran revealed on Monday how much damage US President Donald Trump's tariffs can cause to the Indian economy, saying the country's Gross Domestic Product (GDP) could be reduced by 0.5 percentage points. He said he, however, hopes that the penal tariff is a "short-lived phenomenon".
"Depending upon how long it lasts, even in this financial year, it may translate into a GDP impact of somewhere between 0.5% to 0.6%,” he told Bloomberg TV in an interview.
What CEA Nageswaran said on the Indian economy
Nageswaran, however, said that if the tariff stretches into the next year, the impact of the tariff could grow and become larger, spiralling into a major risk for India.
Donald Trump has imposed a 50 per cent tariff on Indian exports because New Delhi has been buying Russian oil and weapons. The Trump administration has accused India of funding Russia's war in Ukraine by buying Moscow's oil. New Delhi says that by buying discounted Russian oil, it has been safeguarding the interests of its people.
The tariffs have made the Indian exports more expensive than their regional rivals like China, Bangladesh, and Vietnam. The tariffs have threatened jobs in the labour-intensive sectors, including textiles and jewellery.
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The CEA said the government's growth forecast is between 6.3 and 6.8 per cent for the financial year 2025-2026.
He said that the recent GST and inflation cuts will prove to be tailwinds for the economy and will boost "disposable incomes and spending".
Finance Minister Nirmala Sitharaman on Wednesday announced the GST Council's decision to discontinue the 12 per cent and 28 per cent rates. Most of the items under these categories will be moved to the 5 per cent and 18 per cent GST slabs.