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Informist, Friday, Feb. 28, 2025

--CEA: Impact of US' reciprocal tariffs speculative at the moment 

--CONTEXT: CEA's comments at media briefing post GDP growth data for Oct-Dec 

NEW DELHI – The impact of US' reciprocal traiffs on the Indian economy is speculative at the moment, Chief Economic Adviser to the Govenment V. Anantha Nageswaran said on Friday. The US government has announced that starting April, it will impose reciprocal tariffs on all countries, including India, based on the duty levied by them on American goods.

Several analysts have projected that US' reciprocal traiffs may have an impact on India's GDP growth considering the US is India's top export destination, with its share in India's total merchandise exports at about 17%. In 2023-24 (Apr-Mar), India exported goods worth $77.52 billion to the US and had a trade surplus of $35.32 billion. 

"It is not enough to focus on the fact that trade tariff mesaures are dominating headlines but correspondingly, we are also seeing crude oil prices are behaving quite well from the Indian perspective," Nageswaran said. The price of brent crude has been in the range of $70.85 per barrel to $82.63 per barrel in the last three month.

"In the wake of any possible end to the Ukraine war, and if more crude comes into the market then I think lower energy prices can very well offset any trade related impact that may be there, which is at the moment speculative in nature," the CEA said.  

However, Nageswaran also mentioned that all emerging market economies, including India, need to keep their guards up against any likely external shock. "The near-term global economic outlook is influenced by trade policies of major economies amid a slowing disinflation," Nageswaran said. "These policies may fuel inflation, lead to tighter financial conditions, and increase market volatility.  End

US$1 = INR 87.50

Reported by Krity Ambey

Edited by Deepshikha Bhardwaj

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