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Informist, Saturday, May 3, 2025

 

--CEA: Possibility that we may have to get used to stronger rupee 

--CEA: US tariffs won't cause major disruption for India vs other countries 

--CEA: Indian economy's dependence on US small 

 

NEW DELHI – There is a possibility that we may have to get used to a stronger rupee looking at the global weakness in the dollar, Chief Economic Adviser V. Ananth Nageswaran said at an event in New Delhi Saturday.

 

His comment came just a day after the rupee rose past the psychologically-crucial level of 84 a dollar, hitting a seven-month high. The rupee has appreciated 3.4% since March, mainly due to a globally weakening dollar and foreign fund inflows.

 

The dollar index, which measures the strength of the dollar against a basket of six major currencies, fell 4.4% in April due to soft US economic data and President Donald Trump declaring a 90-day pause on his reciprocal tariffs.

 

Talking about the potential impact of US tariffs on India, Nageswaran said India's dependence on the US is small and tariffs by the world's largest economy may not cause as big a disruption for India as for some other countries.

 

"I don't think the tariffs per se, whichever way they go, are a major disruption for India compared to many other countries and again, where we come out also depends on the tariff incidents that other countries will face," he said at the Ashoka University-ICPP Growth Conference.

 

On Apr. 2, Trump had announced reciprocal tariffs on countries around the world to address what he perceived as unfair trade practices by them and to reduce the US trade deficit. He imposed a 26% duty on goods imported from India. However, on Apr. 9, he declared a 90-day pause on the tariffs and dropped the rate to 10% during this period.

 

Negotiations between India and the US over a proposed bilateral trade agreement are currently underway. "Conversations are currently going on between the two governments and there is both a tactic and a strategy that is evolving as we speak," Nageswaran said.  End

 

Reported by Pratiksha

Edited by Rajeev Pai

 

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