Navigating Economic Challenges: India's Strategic Path Forward

Chief Economic Advisor V Anantha Nageswaran on Wednesday predicted US tariff-related issues would resolve in the next one or two quarters. He stressed the importance of private sector involvement in addressing longer-term challenges impacting India's economy.

Nageswaran linked FY25's growth slowdown, from 9.2% in FY24 to 6.5%, to tight credit conditions and liquidity woes. Correct agricultural policies could boost real GDP growth by 25%, he noted. Nageswaran underscored the difficulties posed by second and third-order impacts of US tariffs, particularly on sectors like textiles and jewellery.

He acknowledged ongoing government talks with affected industries and the importance of patience from stakeholders as policymakers craft their response. Speculation surrounds potential US trade talks with India, as international dynamics shift rapidly. Nageswaran stressed focusing beyond tariff woes, citing AI impacts, mineral dependency, and the importance of supply chain resilience, urging the private sector's strategic engagement.

(With inputs from agencies.)