U.S. Tariffs and India's Economic Resilience: A Closer Look

The United States' recent imposition of tariffs on Indian exports may not heavily impact the current financial year's outlook, as explained by V Anantha Nageshwaran, the Chief Economic Advisor to the Government of India. With exports to the U.S. almost reaching half of last year's figure within the first five months, Nageshwaran suggests the impact could be minimal, assuming no major economic shifts occur.

Speaking at AIMA's 52nd National Management Convention, Nageshwaran elaborated on the complexity of measuring the effects of tariffs and GST with precision due to inherent uncertainties. While immediate effects of the 25% tariff are estimated, long-term consequences hinge on the duration of these duties, potentially affecting investments and capital growth. GST reforms, he noted, could counterbalance negative effects by stimulating domestic demand.

Nageshwaran highlighted the need for job creation amid technological integration, estimating an annual necessity for eight million new jobs. The CEA advocated a strategic partnership between government and businesses, cautioning against excessive technological replacement of labor. He acknowledged ongoing labor reforms, emphasizing their role in balancing worker rights and economic growth without overshadowing potential for job creation and social stability.