CEA hints at resolution to US tariff dispute, flags manufacturing push

Kolkata: Chief Economic Advisor (CEA) to the Finance Ministry, V Anantha Nageswaran, on Thursday said in Kolkata that a solution to the tariff issues between India and the United States is likely within the next eight to ten weeks.

Speaking at an interactive session organised by the Bharat Chamber of Commerce here, Nageswaran said: “Underneath the surface, conversations are going on between the two governments. My hunch is that in the next eight to ten weeks, we will likely see a solution to the penal tariff imposed by the US on Indian goods.”

The US had imposed an additional 25 per cent tariff on Indian products from August in response to New Delhi’s purchase of Russian oil, taking the total levy to 50 per cent. Nageswaran remarked that the 50 per cent tariff was unexpected and expressed confidence that the penal duty would not continue beyond November 30. He also said reciprocal tariff measures would be addressed subsequently. India’s exports to the US stood at $85 billion.

At another event, ‘India@3: The Road to Becoming the World’s Third Largest Economy’, organised by the Merchants’ Chamber of Commerce & Industry, the CEA noted India’s GDP grew 7.8 per cent in the first quarter of 2025. Per capita income has touched $2,600, with consumption contributing 60 per cent.

He said agriculture’s contribution to value added was rising, while manufacturing’s share in GDP remained stable at 18 per cent, declining in gross value added terms only due to price indices. He called for expanding the manufacturing base, emphasising, “No manufacturing, no nation.”

Nageswaran said rural demand remains resilient, urban demand is strengthening, and foreign direct investment reached $25 billion in Q1, expected to touch $100 billion this fiscal. He stressed supply chain diversification away from China and noted government bond yields had declined from 9 to 6.5 per cent due to fiscal prudence.