Chief Economic Adviser V Anantha Nageswaran addressing an interactive session in Kolkata
Kolkata (WB), Sept 18: Chief Economic Adviser (CEA) V Anantha Nageswaran on Thursday said a resolution to the tariff issues between India and the United States is likely within the next eight to ten weeks.
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Tariff Dispute with the US
The US had imposed an additional 25 per cent tariff on Indian products following India’s purchase of Russian oil, raising the total levy to 50 per cent from August. “Underneath the surface, conversations are going on between the two Governments. My hunch is that in the next eight to ten weeks, we will likely see a solution,” Nageswaran said at an event organised by the Bharat Chamber of Commerce. He added that if the tariffs continue, Indian exports to the US could see a decline.
At a separate event by the Merchants Chamber of Commerce and Industry, he expressed hope that the penal tariffs could be removed by the end of November, clarifying that it was his personal intuition.
Economic Outlook
Terming India an “aspirational lower-middle-income economy,” Nageswaran said real GDP growth in the first quarter of the financial year was 7.8 per cent. He noted that India has outpaced many economies post-pandemic, with growth driven by manufacturing, services, and agriculture. Consumption and investment, he said, will continue to anchor growth over the next two years.
Fiscal and External Strength
The CEA highlighted India’s healthy debt-to-GDP ratio and efficient capital utilisation. Rural demand remains steady while urban demand is strengthening, aided by relief in GST rates and higher disposable income. He said credit flow to MSMEs is rising, while structural changes are evident in lending to large industries.
On the external front, he pointed out that trade remains robust, forex reserves are healthy, and the current account deficit narrowed to 0.2 per cent of GDP in Q1 of FY 2025-26.
Currency and Policy Priorities
Discussing the rupee’s performance, Nageswaran said, “The rupee is depreciating against the US dollar. Given the underlying strength of the economy, I believe the rupee is likely to hold its value and become stronger in the long run.”
He outlined government priorities, including continued capital expenditure, boosting private investment through incentives, deregulation, and expansion of physical infrastructure like ports and airports.
Other Key Points
On India’s trade with China, the CEA said most imports are capital and intermediate goods. He urged the Indian private sector to step up R&D spending and innovation. On artificial intelligence (AI), he remarked that its impact has been marginal so far, though coding-level jobs may be at risk. “People have to upskill themselves,” he said.
- Tariff Issue: US imposed 50% levy on Indian products
- Resolution Timeline: Likely in 8–10 weeks, possibly by November
- Q1 GDP Growth: 7.8% in 2025–26 fiscal
- CAD: Narrowed to 0.2% of GDP in Q1
- Rupee Outlook: Expected to stabilise and strengthen long term
Source: PTI
Labels: Economy, US Tariff, CEA, Trade
Tags: #CEA #TariffDispute #USIndiaTrade #Economy #GDPGrowth
Disclaimer: This article is a rewritten summary based on reporting by PTI. Jammu News Portal does not assume responsibility for the accuracy of external content.
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