mumbai: Chief Economic Advisor V Anantha Nageswaran on Wednesday said US tariffs-related challenges will dissipate in the next one or two quarters, and urged the private sector to do more as the country navigates through other longer-term challenges.
He attributed the growth slowdown in FY25, which saw a deceleration to 6.5 per cent from FY24’s 9.2 per cent, to tight credit conditions and liquidity issues. The right agriculture policies can add 25 per cent to real GDP growth, Nageswaran added.
On the US tariffs, the CEA said it is the second and third order impacts, which will flow once sectors like gems and jewellery, shrimps and textiles have taken the first order brunt, that will be “more difficult” to tackle.
The government is aware of the situation and conversations with the impacted sectors have already begun, Nageswaran said, adding that one will hear from the policymakers in the coming days and weeks but people have to be patient.
With speculation on whether US officials will visit India for trade talks later this month as reported, Nageswaran said the upcoming meet in Alaska between US President Donald Trump and his Russian counterpart Vladmir Putin is likely to influence the outcome.
Declining to spell out any details on the trade negotiations between India and the US, the academic-turned-advisor said things are very fluid at the world stage right now with relations swinging from cooperation to stalemate, and spelled out his expectation of the impact of 50 per cent US tariff on Indian exports.
“I do believe that the current situation will ease out in a quarter or two. I don’t think that from a long-term picture, the India impact will be that significant but in the short run, there will be some impact,” he said.
He said no one can guess the exact reasons why President Donald Trump chose to slap the high tariffs on India, wondering if it’s the fallout of Operation Sindoor or something even more strategic.
However, the CEA said the focus on tariff-related issues should not blind us to more “important challenges”, including the impact of artificial intelligence, reliance on one country for critical minerals, and their processing and strengthening of supply chains.
He exhorted the private sector to do more “as we navigate these longer-term challenges, promising that public policy will play the facilitator’s role”.
“Private sector also has a lot of thinking to do, given the massive strategic challenges we face in the coming years... the private sector also has to think about the long-term rather than the next quarter, which is what might have led to many of the challenges we are currently beginning to face,” he said in the comments aimed at India Inc. He, however, did not elaborate on the subject any further.
Stating that the government has allocated money towards the research purposes, he said it is now for the private sector to up their investments in the area.
The youth is staring at both physical and health health issues arising from excess screen use, consumption of ultra processed food, etc, which is leading to anxieties and even suicidal thoughts, he said, seeking the private sector’s help to tackle the challenge.